Chinese electric vehicle (EV) manufacturer BYD secured mining rights for two plots in Minas Gerais, Brazil’s lithium-rich region also known as ‘Lithium Valley’, in 2023, according to a report by Reuters, citing public records.
This move marks BYD’s entry into the mining sector in its largest market outside China.
The acquisition was made through BYD’s subsidiary, Exploracao Mineral do Brasil, established in May 2023.
The subsidiary was formed with a share capital of 4m reais ($695,000) and recorded a profit of around 213,000 reais in 2023, mainly due to exchange rate variations.
Currently, the company is in the research phase without financial movement or operating revenues.
BYD’s mineral rights cover 852ha (8.5km²) in Coronel Murta, part of the Jequitinhonha Valley in Minas Gerais, close to US-listed miner Atlas Lithium’s holdings.
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By GlobalDataCoronel Murta is approximately 825km (512 miles) from BYD’s factory complex on the coast of Bahia state, where the company plans to produce 150,000 EVs annually.
Since acquiring the mineral rights, BYD has engaged Minagem Geologia e Mineracao, a local mineral research company.
Global interest in Brazil’s strategic minerals has been highlighted by recent visits from US, Saudi and Chinese delegations.
Unlike its South American neighbours, Brazil has maintained a more open market for lithium, easing export controls in 2022.
The country’s best lithium prospects are hard rock deposits, suitable for traditional mining methods, unlike the challenging extraction from salt flats in Argentina, Bolivia and Chile.
BYD’s investment in Brazilian lithium underscores its commitment to Latin America’s largest economy, despite recent accusations of labour abuses at its former Ford factory complex.
The Financial Times reported that BYD had discussions with Sigma Lithium, a Brazil-based lithium producer, in 2024 about a potential supply agreement or joint venture.
According to Luiz Fernando Visconti of Visconti Law, a mining sector law firm, it can take eight to 15 years for a mining project in Brazil to reach production if deemed economically viable.
BYD has also previously invested in major Chinese miners and was one of six companies allowed to bid on a Chilean lithium project last year. The company is also planning a lithium cathode plant in northern Chile.
