BYD Expands into Lithium Mining with Brazilian Acquisition

Chinese EV giant BYD (SZ:002594) has acquired mineral rights in Brazil, marking a major step into lithium mining in its largest market outside China. The acquisition, made in late 2023 through its subsidiary Exploracao Mineral do Brasil, covers 852 hectares in Coronel Murta, a lithium-rich area in Minas Gerais known as "Lithium Valley."

The newly formed subsidiary, established in May 2023 with a share capital of 4 million reais ($695,000), has yet to generate operational revenue and remains in the research phase. The mining plots are strategically located near BYD’s planned factory in Bahia state, where the company aims to produce 150,000 electric vehicles annually. These sites also neighbor properties owned by U.S.-listed Atlas Lithium (NYSE:ATCO).

BYD's move aligns with its broader global strategy, which includes lithium investments in China and bidding on a Chilean lithium project. Brazil has become a key player in the race for strategic minerals, attracting interest from global powers, including the U.S., Saudi Arabia, and China. Unlike its South American neighbors, Brazil has taken a more open-market approach to lithium, easing export controls in 2022.

While the Brazilian mining process can take up to 15 years, BYD has hired Minagem Geologia e Mineracao to conduct mineral research. This investment underscores BYD’s commitment to securing a stable lithium supply, reinforcing its expansion into Latin America's largest economy.

Reports also indicate BYD previously held discussions with Sigma Lithium (TSXV:SGML), Brazil’s top lithium producer, for a potential partnership or acquisition. However, the company has not commented on its latest mining venture.