In 2023, BYD acquired mineral rights in Brazil’s lithium-rich Minas Gerais through its subsidiary, Exploracao Mineral do Brasil. The company is in the research phase, with plans to produce electric vehicles while exploring local mineral resources. Collaborative efforts and a focus on leveraging Brazil’s open lithium market mark BYD’s strategic investment in the region.
In 2023, BYD, a Chinese electric vehicle (EV) manufacturer, obtained mining rights for two plots in Minas Gerais, a region known for its lithium deposits, referred to as ‘Lithium Valley’. This acquisition represents BYD’s strategic entry into the mining sector, particularly significant as Brazil is its largest market outside China. The rights were secured through BYD’s subsidiary, Exploracao Mineral do Brasil, which was established in May 2023.
The subsidiary has a share capital of 4 million reais (approximately $695,000) and reported a profit of about 213,000 reais in its first year, influenced mainly by fluctuations in exchange rates. Currently, the subsidiary is in its research phase and has yet to initiate any financial operations or generate revenue. The mineral rights encompass an area of 852 hectares (8.5 km²) in Coronel Murta, near US-listed Atlas Lithium’s holdings.
Coronel Murta is located around 825 kilometers (512 miles) from BYD’s manufacturing facility in Bahia state, where the firm aims to produce 150,000 EVs annually. Post-acquisition, BYD has collaborated with Minagem Geologia e Mineracao, a local mineral research firm, to further explore the potential of its mining rights. The heightened global interest in strategic minerals has been reflected in visits to Brazil by delegations from the US, Saudi Arabia, and China.
Brazil stands out amongst South American nations due to its relatively open lithium market, having relaxed export controls since 2022. The country’s lithium deposits, primarily hard rock, lend themselves to conventional mining methods, contrasting with the more complex extraction processes found in Argentina, Bolivia, and Chile, which rely on salt flats.
BYD’s move into Brazilian lithium reinforces its investment in Latin America’s economic landscape, despite facing allegations of labor violations at its previous Ford factory site. According to Financial Times, BYD has also initiated talks with Sigma Lithium, a Brazilian lithium producer, regarding a potential supply agreement or joint venture planned for 2024.
Mining projects in Brazil can take between eight to fifteen years to reach production if deemed economically viable, according to Luiz Fernando Visconti from Visconti Law, a firm specializing in mining law. Additionally, BYD has a history of investing in major Chinese mining companies and was one of six bidders for a lithium project in Chile last year. Furthermore, BYD is planning to establish a lithium cathode plant in northern Chile.
BYD’s acquisition of lithium mining rights in Brazil highlights its commitment to the region’s lucrative mineral wealth, particularly as it strengthens its position in the electric vehicle market. The establishment of a subsidiary in Brazil marks a significant strategic move as the company navigates the complexities of resource extraction and global supply chains. Upcoming collaborations and investments, along with the reality of lengthy mining project timelines, will shape BYD’s future in the sector.
Original Source: www.mining-technology.com
