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Chinese giant enters mining once and for all: proximity to the Bahia factory and expansion in Latin America's largest market reinforce BYD's global dominance in the electric battery sector
Chinese electric vehicle giant BYD is not only revolutionizing sustainable mobility, but also taking concrete steps in the global race for strategic minerals. In 2023, the company secured mining rights to two parcels in Brazil’s Lithium Valley, one of the most promising markets for the battery-critical metal. What does this move mean for the industry and the global geopolitics of lithium?
BYD's entry into Brazilian mining
BYD Exploração Mineral do Brasil was created in May 2023 with a share capital of R$4 million. Still in the research phase and with no operating revenue, the subsidiary acquired two plots of land strategically located in Coronel Murta, a region that is part of the Lithium Valley in the state of Minas Gerais.
The land is close to the Atlas Lithium project and half a day away from BYD's new factory in Bahia, consolidating the automaker's expansion in Latin America. The move indicates that the company is positioning itself for a future where control of the battery supply chain will be decisive for leadership in the electric vehicle sector.
- This rare product could make Brazil one of the richest countries on the planet
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- Mine ventilation systems use advanced technologies to ensure air circulation, control hazardous gases and protect the health of workers in highly complex underground environments.
- A 1979 deep-sea mining experiment carved up the ocean floor, and only now, 44 years later, are scientists beginning to understand its lasting environmental impacts.
What does this movement mean?
Brazil has been attracting global interest in the lithium sector, especially from countries such as the United States, China and Saudi Arabia. Unlike its South American neighbors, Brazil has relaxed export rules, making it an attractive market for international investment.
Brazilian lithium is extracted from hard rock, a more direct and predictable process than salt mines, which are common in Argentina, Chile and Bolivia. This makes the country a viable alternative for mining companies looking to avoid the environmental and regulatory challenges of other locations.
The challenges and opportunities for BYD
Mining is not a quick business. It is estimated that a project can take between eight and fifteen years to become operational, if it is deemed economically viable. However, BYD is no stranger to the sector: the company already has stakes in major Chinese mining companies and has plans for a lithium cathode plant in Chile.
In Brazil, BYD has hired Minagem Geologia e Mineração to conduct research at the site. If confirmed economic viability, Lithium exploration can strengthen the company's control over its own supply chain, reducing dependence on external suppliers and guaranteeing raw materials for its batteries.
Impact on the lithium market and geopolitics
BYD’s presence in Lithium Valley could also directly impact other companies in the sector. Atlas Lithium CEO Marc Fogassa said he learned of BYD’s entry through third parties and stressed that the automaker’s presence adds value to the surrounding areas.
According to Reuters, BYD's move is a reflection of the growing international dispute over access to strategic minerals. Delegations from the US, China and Saudi Arabia have already visited Brazil in search of opportunities, showing that the country has become a battlefield for investments in lithium.
The future of BYD in Brazil and the lithium sector
The acquisition of mineral rights in Coronel Murta is just another step for BYD in consolidating its presence in Brazil. The company's new factory in Bahia, which will have the capacity to produce 150 electric cars per year, directly benefits of this strategy.
If BYD can accelerate the development of its mining operations, it could become a key player in supplying lithium to the global market. It remains to be seen whether the automaker will be willing to face the regulatory and environmental challenges of the sector and whether Brazil will establish itself as a reliable supplier of lithium for the global energy transition.
Passing our ore to the Chinese, as always….
Brazil is really a backward country…sad