- BYD acquired mining rights to two plots of land in a lithium-rich part of Brazil in 2023, Reuters reported.
- BYD's mineral rights are located in the Jequitinhonha Valley, known as Brazil's lithium valley.
BYD (HKG: 1211, OTCMKTS: BYDDY) has acquired mining rights for two plots of land in a lithium-rich part of Brazil in 2023, entering the mining business in its largest market outside China, according to a Reuters report today.
The previously unreported deal in late 2023 was carried out by BYD subsidiary Exploracao Mineral do Brasil, which was founded in May of that year, Reuters said, citing public records.
The parcels are a half-day's drive from BYD's new factory project in northeastern Brazil, in which BYD has also agreed to invest in 2023, according to the report.
BYD's mineral rights cover 852 hectares (8.5 square kilometers) of land in the town of Coronel Murta, part of the Jequitinhonha Valley in the state of Minas Gerais known as Brazil's Lithium Valley, the Reuters report noted.
It's worth noting, however, that the lithium project could be a long way from starting production.
Luiz Fernando Visconti, an attorney at Visconti Law, a law firm specializing in mining, said that if a mining project is deemed economically viable, it typically takes eight to 15 years to start production in Brazil, according to Reuters.
On July 4, 2023, BYD and the state government of Bahia announced that the company would set up a large manufacturing site complex consisting of three plants in Brazil.
The industrial complex includes a production plant focusing on electric bus and truck chassis, a new energy passenger car production plant, and a processing plant specializing in lithium iron phosphate (LFP) battery materials.
Construction began in March 2024 on the manufacturing site complex, partly on the site of the former Ford Brazil plant.
In January last year, the Financial Times reported that BYD was in talks with Brazilian lithium producer Sigma Lithium about a supply agreement to secure access to the material, which is a key raw material for power batteries.
The two were discussing a possible supply agreement, joint venture or acquisition, the Financial Times report said, citing Alexandre Baldy, BYD's head of operations in the South American country.
Lithium is one of the key raw materials for batteries, which typically account for a large portion of the cost of an electric vehicle (EV).
Lithium prices saw a wild ride in China in 2022, with the price of battery-grade lithium carbonate rising to RMB 590,000 ($81,060) per ton in November of that year, up about 14 times from RMB 41,000 per ton in June 2020.
However, after that, the price of lithium carbonate saw a prolonged decline, with battery-grade lithium carbonate now priced below RMB 80,000 per ton in China.
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