China's BYD holds mining rights in Brazil's Lithium Valley, documents show

Chinese electric carmaker BYD (1211) acquired mineral rights for two plots of land in a lithium-rich part of Brazil in 2023, entering the mining business in its biggest market outside of China, according to public records reviewed by Reuters.

The EV producer's acquisition of mineral rights in Brazil is its most concrete step so far toward mining strategic minerals in the Western Hemisphere.

The previously unreported acquisition of the mineral rights in late 2023 was made by BYD subsidiary Exploracao Mineral do Brasil, which was created in May of that year, documents showed.

The plots are just a half-day's drive from BYD's new factory project in northeast Brazil, which it also agreed to invest in 2023. They also neighbor plots owned by U.S.-listed miner Atlas Lithium.

The subsidiary was created with a share capital of 4 million reais (HK$5.42 million) and turned a profit of about 213,000 reais from exchange rate variations in 2023, public registration documents showed.

The company "is in the research phase, with neither financial movement nor operating revenues," said a report from an October shareholders meeting seen by Reuters.

BYD declined to comment on the matter.

BYD, which bought stakes in major Chinese miners, was one of six firms allowed to bid on a Chilean lithium project last year, and outlined plans for a lithium cathode plant in northern Chile.

Recent visits by US, Saudi and Chinese delegations have underscored global interest in Brazil as an open market in the geopolitical race for access to strategic minerals.

Brazil has avoided a heavy state presence in its lithium sector, unlike its South American neighbors, even easing export controls on the metal in 2022.

Its best lithium prospects are hard rock deposits that lend themselves to traditional mining, unlike tricky lithium extraction from salt flats in Argentina, Bolivia and Chile.

BYD's prospecting for Brazilian lithium reinforces the scale of its bet on Latin America's largest economy, where the firm's major investment in a former Ford factory complex was tarnished in December with accusations of labor abuses at the worksite.

Last year, the Financial Times reported that BYD had talks with Sigma Lithium, Brazil's biggest lithium producer, over a possible supply agreement, joint venture or acquisition.

REUTERS