BYD Secures Lithium Mining Rights In Brazil

Chinese automaker BYD has acquired mineral rights for 852 hectares in Coronel Murta, Minas Gerais, Brazil. The land is located in the Jequitinhonha Valley, known as "Lithium Valley," which holds over 80 percent of Brazil’s lithium reserves. The acquisition was made through BYD’s subsidiary, Exploracao Mineral do Brasil.

The move aligns with BYD’s vertical integration strategy, aimed at securing raw materials for EV battery production. Lithium is a critical component of lithium iron phosphate (LFP) batteries, widely used in electric vehicles. The acquisition complements BYD’s upcoming manufacturing complex in Bahia, where the company plans to produce up to 1,50,000 EVs annually.

Brazil’s lithium deposits are primarily hard rock pegmatites, allowing for cost-effective extraction compared to brine-based methods used in other South American countries. Production costs in Brazil range between $400 and $500 per metric ton. Regulatory changes in 2022 eased restrictions on lithium exports, positioning Brazil as a key player in the global lithium market. The country aims to increase its share of global lithium production from 2 to 25 percent by 2030.

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Industry experts indicate that lithium mining projects in Brazil typically take between eight and 15 years to become operational. BYD has not yet disclosed specific plans for lithium extraction or processing at its newly acquired site. However, the company has pursued similar initiatives in Chile and has been in discussions with Sigma Lithium, Brazil’s largest lithium producer, for potential collaboration. While lithium production at BYD’s new site is not expected in the near term, the acquisition marks a significant step in the company’s long-term strategy to secure raw materials for its EV supply chain.

BYD’s direct involvement in lithium mining could increase global lithium supply, stabilizing production costs and reducing dependency on external suppliers. The move may encourage other EV manufacturers to pursue similar mining investments, intensifying competition for lithium resources. Additionally, advancements in lithium extraction and processing technology could result from increased investment in the sector.

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