The Volkswagen and Ningde era are also potential bidders.
According to the Financial Times, the head of BYD South America, Alexandre Baldy, said discussions have been held with Brazilian lithium producer Sigma Lithium with a market capitalization of 2.9 billion US dollars (about 20.822 billion yuan) about supply agreements, joint ventures or acquisitions.
BYD, which recently surpassed Tesla and became the world's largest electric vehicle manufacturer, is planning to invest 3 billion reais (about 620 million US dollars) in Brazil to build the first electric vehicle factory outside of Asia.
Baldy revealed that BYD is looking for lithium assets in Brazil with the goal of establishing an integrated supply chain and is having a “very positive” conversation with Sigma:
“The two sides have had in-depth discussions on various aspects such as supply, joint ventures, and acquisitions, and there is currently no final outcome.”
BYD's actions in Brazil are part of its strategy to rapidly expand overseas markets. The company is also planning to build a factory in Hungary and is in negotiations with Mexico to build a factory. At the same time, many of the world's largest automobile manufacturers have also chosen to sign agreements directly with miners to ensure the safe supply of raw materials.
Volkswagen and Ningde Era are also potential bidders
Beginning last year, Sigma Lithium began processing and transporting lithium, a key material for manufacturing electric vehicles, from its mine in Minas Gerais, Brazil.
In the first nine months of 2023, Sigma's net loss was 25.5 million Canadian dollars (about $19 million), but it was reduced by almost half compared to the same period last year. Despite this, Sigma shares have fallen by more than 33% over the past six months, partly due to a sharp drop in lithium prices and concerns about oversupply.
According to reports, Sigma is currently undergoing a strategic review, which may sell the company or list its Brazilian subsidiary on NASDAQ or the Singapore Exchange. Although headquartered in Vancouver, Sigma's main assets are located in Brazil.
According to Brazilian media Exame, Volkswagen and Chinese battery manufacturer Ningde Times are also potential bidders.
Volkswagen said, “We are exploring the market globally and are in conversation with many potential partners,” but declined to comment on market rumors. According to Statista statistics, the countries with the highest global lithium production in 2022 were Australia, Chile, China, and Argentina, followed by Brazil.
Sigma's business is to mine lanceolite ore and process it into battery-grade lithium concentrate, and the company plans to triple its annual production capacity to 270,000 tons.
Editor/Somer