BYD invests 4.45 billion yuan to build a factory in Brazil and plans to acquire lithium mine developer Sigma

Source: Xinzhixun

    On January 14th, according to the Financial Times, BYD‘s Chairman in South American countries, Alexandre Baldy, stated that he has discussed supply agreements, joint ventures, or acquisitions with Brazilian lithium developer Sigma Lithium. The current market value of the company is approximately 2.9 billion US dollars (approximately 20.8 billion RMB).

    Previously, BYD announced that it would establish a large production base complex consisting of three factories in the city of Camari, in collaboration with the government of the state of Ia in Brazil, with a total investment of R $3 billion (approximately RMB 4.452 billion)

    It is reported that the BYD Brazil production base complex will consist of three factories, namely a production factory specializing in electric passenger cars and truck chassis, a new energy passenger vehicle production factory, and a processing factory specializing in lithium iron phosphate battery materials. Among them, the new energy passenger vehicle production line covers pure electric and plug-in hybrid models, with a planned annual production capacity of 150000 vehicles. After the completion of the factory, it is expected to create over 5000 job opportunities in the local area.

    Baldy stated that BYD is currently searching for lithium assets in Brazil with the goal of building an integrated supply chain, and is therefore engaging in an "active" dialogue with Sigma.

    Brazil is the top 5 country in terms of global lithium resource supply. Data shows that since 2019, Brazil‘s lithium resource supply has significantly increased. In 2021, Brazil supplied approximately 1500 metal tons, accounting for 1% -1.5%, ranking sixth globally. In 2022, it supplied approximately 2200 metal tons, accounting for about 2%, ranking fifth globally. Research firm SGB predicts that Brazil will produce nearly 5% of the world‘s lithium mines around 2030.

    Sigma Lithium is headquartered in Canada and its main assets are located in Brazil. Its business is to extract lithium mica ore and process it into battery grade lithium concentrate.

    Its wholly-owned subsidiary Sigma Mineracao S.A. (Sigma Brazil) is developing the Grota do Cirillo spodumene project in Brazil. This project is the largest and highest grade hard rock project in the Americas, with a total resource of 3.032 million tons of LCE (1.45% lithium oxide).

    According to the plan, the Grota do Cirillo spodumene project will begin trial operation in December 2022, with the goal of shipping by the end of April 2023. The first phase of the project is expected to produce 270000 tons of high-purity battery grade lithium concentrate annually, equivalent to approximately 36700 tons of lithium carbonate equivalent (LCE) per year.

    In addition, based on the latest research results on mineral reserves, Sigma Lithium stated that the project has the potential to produce 768000 tons of lithium concentrate (104000 tons of lithium carbonate equivalent) in the second to eighth year of operation.

    It is worth noting that more than one giant has set its sights on Sigma Lithium. According to Brazilian media Exame, Volkswagen and CATL are also potential bidders for Sigma Lithium. Last February, there were reports that Tesla was considering acquiring this company.