BYD has secured mining rights for two plots of land in Brazil’s lithium-rich Jequitinhonha Valley, marking the company’s entry into the mining sector in its largest market outside China. The acquisition, made through its subsidiary Exploracao Mineral do Brasil, occurred in late 2023, according to a report by Reuters.
The two plots span 852 hectares (8.5 square kilometers) in the town of Coronel Murta, located in the state of Minas Gerais, commonly referred to as Brazil’s Lithium Valley. This move is part of BYD’s broader efforts to expand its footprint in Brazil, a key market for the company as it prepares to scale up its electric vehicle (EV) production.
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The mining rights are situated about a half-day’s drive from BYD’s upcoming factory in northeastern Brazil, where the company is also investing. The new plant, expected to focus on electric bus and truck chassis, new energy passenger cars, and lithium iron phosphate (LFP) battery materials, is scheduled for construction starting in 2024.
BYD’s entry into the lithium mining industry reflects its strategy to secure vital raw materials for its EV production. However, the timeline for extracting lithium from the newly acquired plots may take years. Luiz Fernando Visconti, an attorney at Visconti Law, a firm specializing in mining, noted, “If a mining project is deemed economically viable, it typically takes eight to 15 years to start production in Brazil.”
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In addition to its mining operations, BYD has also been in discussions with Brazilian lithium producer Sigma Lithium regarding a potential supply agreement to bolster its lithium sourcing. This initiative comes at a time when the price of lithium, a critical component in EV batteries, has been volatile. Lithium carbonate prices spiked dramatically in 2022 before experiencing a decline, with current prices below RMB 80,000 per ton in China.