Tesla is reportedly considering acquiring Sigma Lithium Corp, a mining company that is currently developing a large lithium rock deposit in Brazil. This move would help Tesla secure a steady supply of lithium, a key ingredient in the batteries used in electric vehicles (EVs).
Sources familiar with the discussions told Bloomberg that the talks were still in a preliminary stage and that a deal is far from certain. The sources added that Tesla is also considering other mining operations besides Sigma Lithium.
See also: Tesla may get into the lithium mining and refining business directly
If the acquisition goes through, it would be a strategic move for Tesla, as the company has been vocal about the need for additional lithium mining operations to satisfy the growing demand for EVs. Tesla CEO Elon Musk has even suggested that the automaker may have to “get into the mining and refining” of the EV battery ingredient.
Sigma Lithium’s largest shareholder, A10 Investimentos from Brazil, has been actively seeking interest from other miners and automakers about purchasing the company. However, shares of Sigma have tripled in the past 12 months, making any bid more expensive and less attractive to potential suitors.
Sigma Lithium is currently listed on the Toronto stock exchange (TSX) and is trading at around CAD$40 per share, giving it a market capitalization of CAD$4.2 billion. After news of the potential acquisition emerged, shares surged even higher in after-hours trading, up more than 26%.
See also: Tesla Adjusts Agreement with Piedmont Lithium for Continued Lithium Supply from Quebec
Part of the reason for the surge in the company’s stock price is the high expectations being set by the owners. In December, they announced that the mine had 63% more lithium than originally thought and were considering tripling lithium production in 2024 as a result.
Overall, the potential acquisition of Sigma Lithium by Tesla is a clear indication of the automaker’s commitment to securing a steady supply of lithium, which is essential for the production of EV batteries. While the talks are still in a preliminary stage, it will be interesting to see how this story unfolds in the coming months.
