Auto giant BYD to lithium mine again!
Alexandre Baldy, BYD's South American country chairman, said it had held talks with Lithium producer Sigma Lithium about supply agreements, joint ventures or acquisitions, the Financial Times reported.
This will be the first factory built by BYD outside Asia, after BYD and the Bahia state government in Brazil jointly announced in July 2023 that the two sides will set up a large production base complex composed of three factories in the city of Camasari, with a total investment of 3 billion reais (about 4.5 billion yuan).
Byd is looking for lithium assets in Brazil with the goal of building an integrated supply chain and is in "very active" conversations with Sigma, Baldy said.
Byd's investment in Brazil is part of its overseas expansion strategy, which also includes plans to build a factory in Hungary and talks to build a plant in Mexico.
As the world's fifth largest lithium producer, Brazil has abundant lithium resources, according to ECLAC data, in 2022, Brazil's lithium resource production reached 2,200 tons. Exports of lithium have been restricted by Brazil since the 1970s. Around July 2022, the Brazilian government issued a decree allowing the foreign trade of lithium minerals and ores, as well as products made from lithium, lithium metal and lithium alloys and derivatives.
Sigma Lithium is a lithium exploration and development company registered in Canada, its main assets are located in Brazil, in Brazil's lithium mineral rights area has a number of lithium deposits, the business is to mine lithium mica ore and process into battery grade lithium concentrate. Currently, its wholly-owned subsidiary Sigma Mineracao S.A. is developing the Grota do Cirilo spodumene project in Brazil. The project is the largest and highest-grade lithium hard rock project in the Americas, with a total resource of about 3.032 million tons of LCE (1.45% lithium oxide).
According to the plan, the Grota do Cirilo spodumene project is scheduled to start trial operation in December 2022, with the goal of starting shipments by the end of April 2023. In the first phase of the project, it is expected to produce up to 270,000 tons of high-purity battery-grade lithium concentrate per year, equivalent to approximately 36,700 tons of lithium carbonate equivalent (LCE) per year. In addition, based on the results of the latest study of mineral reserves, Sigma Lithium said that the project has the potential to produce 768,000 tonnes of lithium concentrate (104,000 tonnes of lithium carbonate equivalent) in its second to eighth year of operation.
Sigma Lithium expects to become one of the top five lithium producers in the world after the Grota do Cirilo project reaches full commercial production.
It's worth noting that BYD isn't the only company that has taken a liking to Sigma Lithium. Last February, there was news that Tesla was considering buying Canadian Lithium miner Sigma Lithium. Not long ago, Brazilian media "Exame" said that battery company Ningde Times and automaker Volkswagen are also potential bidders for Sigma Lithium business.
Vw said: "We are exploring the market for raw materials and are in talks with many potential partners in different regions of the world." The company added that it would not comment on "market rumours". Separately, BYD's parent company and Sigma Lithium did not respond to requests for comment on the acquisition.
Sigma Lithium shares have lost about a third of their value in the past few months due to a sharp drop in lithium prices and concerns about supply and demand in the market.
Sigma Lithium is listed on the US stock market and has a market capitalization of about $2.8 billion at press time. In January, the company said it had launched preliminary plans to list Sigma Lithium Brazil on the NASDAQ and Singapore stock exchanges.
