Chinese electric vehicle (EV) manufacturer BYD has acquired mining rights in Minas Gerais, Brazil, a region known as Lithium Valley, marking its entry into the mining sector in its largest market outside China.
BYD’s Mining Expansion in Brazil
According to public records cited by Reuters, BYD secured two mineral plots in 2023 near its new factory project in northeastern Brazil. These plots are also close to US-listed miner Atlas Lithium’s holdings.
- The acquisition was made through Exploração Mineral do Brasil, a BYD subsidiary established in May 2023.
- The subsidiary was formed with 4 million reais ($695,000) in share capital and recorded a profit of 213,000 reais in 2023, mainly due to exchange rate fluctuations.
- Currently, the company is still in the research phase and has no operating revenues or financial transactions.
BYD’s mineral rights cover 852 hectares (8.5 km²) in Coronel Murta, a region in the Jequitinhonha Valley of Minas Gerais. This location is approximately 825 km (512 miles) from BYD’s planned factory in Bahia state, where the company aims to produce 150,000 EVs annually.
Growing Global Interest in Brazil’s Lithium
The demand for strategic minerals in Brazil has surged, attracting US, Saudi, and Chinese delegations in recent years.
- Unlike Argentina, Bolivia, and Chile, where lithium extraction mainly involves challenging salt flat operations, Brazil’s lithium resources are found in hard rock deposits, making them more suitable for traditional mining methods.
- In 2022, Brazil eased export controls on lithium, creating a more open market than its South American neighbors.
To advance its mining efforts, BYD has partnered with Minagem Geologia e Mineração, a local mineral research company.
BYD’s Broader Lithium Strategy
BYD’s investment in Brazilian lithium highlights its commitment to Latin America’s largest economy, despite recent controversies regarding labor practices at its former Ford factory complex.
- In 2024, the Financial Times reported that BYD held discussions with Sigma Lithium, a Brazilian lithium producer, about a potential supply agreement or joint venture.
- The company has previously invested in major Chinese miners and was one of six companies allowed to bid on a Chilean lithium project in 2023.
- Additionally, BYD is planning to build a lithium cathode plant in northern Chile.
Challenges and Future Prospects
Developing a lithium mining project in Brazil is a long-term process. According to Luiz Fernando Visconti, a mining law expert from Visconti Law, it typically takes eight to fifteen years for a mining project to become operational, provided it is deemed economically viable.
Despite these challenges, BYD’s expansion into lithium mining reinforces its vertical integration strategy, securing raw materials for battery production and strengthening its position in the global EV market.
