BYD goes hunting for lithium assets in the region to further strengthen its integrated supply chain.
In what is to be BYD’s latest move to further cement its growing popularity over in Latin America, the Chinese automaker has recently held talks with Brazil’s Sigma Lithium over a possible supply agreement for that aforementioned metal. It has even been further reported for the EV juggernaut to possibly partner or even acquire outright the $2.9-billion (RM 13.6 billion) minerals company, but neither party in this deal has officially confirmed anything thus far.
BYD’s chair in the South American nation, Alexandre Baldy said for the automaker to have met Sigma’s chief executive Ana Cabral Gardner in São Paulo last month, but declined to give more details about the talks, citing a confidentiality agreement. He nevertheless did state for these talks to be open thus far, with “different strands are being discussed about supply, a joint venture, an acquisition . . . nothing is concrete.”
A key element for the production of EV batteries, BYD has also clearly stated that it aims for talks with Sigma to bear fruit in furthering its goal of assembling an integrated supply chain in the region. The Chinese automaker is after all currently building its first EV factory outside of Asia in a new industrial complex in northeastern Brazil to the tune of 3 billion reais (RM 2.9 billion), with operations expected to start in mid-2024.
As for a little bit more information on the Brazilian minerals company meanwhile, Sigma began shipping the silvery-white metal from its hard rock mine and processing plant in the state of Minas Gerais last year. The company currently concentrates on mining spodumene ore and processes it into battery-grade lithium concentrate, with plans to triple its annual production capacity of 270,000 tonnes this year.
During its inaugural year of production however, Sigma posted a $19 million (RM 89 million) net loss in the first nine months of 2023 — almost halved from the same period a year before — on revenue of $97 million (RM 454 million). Its share price listed on Nasdaq have in turn fallen about a third over the past six months, amid a sharp fall in lithium prices that has stirred concerns of oversupply.
