BYD acquires right to mine Lithium from Brazil: Public registration documents

To vertically integrate the supply chain, Chinese electric automaker BYD has entered the mining industry by acquiring mineral rights to exploit two lithium-rich plots of land in Brazil, according to a report by Reuters. 

The update marks the most significant move by the EV manufacturer towards mining key minerals in the Western Hemisphere thus far.

Documents revealed that BYD subsidiary Exploracao Mineral do Brasil, established in May 2023, acquired the mineral rights late that year, a move that had not been previously reported, Reuters reported.

The new plant project in northeast Brazil, which BYD also pledged to invest in in 2023, is only a half-day drive from the mining plots. The U.S.-listed miner Atlas Lithium (ATLX.O) also owns neighbouring properties.

Citing the public registration documents, the report by Reuters further added that the company was established with a 4 million reais ($695,000) share capital and made roughly 213,000 reais in profit from exchange rate fluctuations in 2023.

“The company is in the research phase, with neither financial movement nor operating revenues," according to Reuters.

In addition to outlining plans for a lithium cathode facility in northern Chile, BYD, which purchased shares in significant Chinese miners, was one of six companies permitted to bid on a Chilean lithium project last year.

Delegations from the United States, Saudi Arabia, and China have recently visited Brazil, highlighting interest in the country as a free market in the geopolitical competition over vital mineral resources.

Unlike its neighbours in South America, Brazil has avoided significant governmental participation in the lithium industry, even loosening export restrictions on the metal in 2022. In contrast to the challenging lithium extraction from salt flats in Argentina, Bolivia, and Chile, Brazil’s best lithium are hard rock resources that are accessible from traditional mining.

BYD's mining rights encompass 852 hectares (8.5 square kilometres) in the municipality of Coronel Murta, which is located in the Jequitinhonha Valley, also referred to as Brazil's Lithium Valley, in the state of Minas Gerais.

Following preliminary geological mapping of the region, the company announced on its website in June that the nearby Atlas Lithium project in Coronel Murta was now in the study stage, according to the report of Reuters. 

Although he never spoke with the automaker directly, Atlas CEO Marc Fogassa claimed to have heard about BYD's participation from a third party.