BYD Secures Mining Rights in Brazil’s Lithium Valley

By entering Lithium Valley, BYD is not only strengthening its battery supply chain but also consolidating its position in Latin America, a key region for the global expansion of electric vehicles.

Chinese electric vehicle (EV) giant BYD has taken a significant step in its global expansion by acquiring mining rights in one of Brazil’s lithium-rich regions, according to public documents reviewed by Reuters. This move underscores BYD’s commitment to Latin America and its positioning in the intensifying global competition for access to critical minerals.

BYD Enters the Mining Business in Brazil

In 2023, BYD, through its subsidiary Exploracao Mineral do Brasil, secured mineral rights for two plots of land in the Jequitinhonha Valley, located in the state of Minas Gerais—a region known as Brazil’s "Lithium Valley." This acquisition marks BYD’s formal entry into the mining sector in its largest market outside of China.

The plots, covering 852 hectares in the town of Coronel Murta, are just a half-day’s drive from BYD’s new factory project in northeastern Brazil, which was also announced in 2023. Additionally, the land neighbors areas owned by U.S.-listed mining company Atlas Lithium, highlighting the strategic value of the location.

A Strategic Bet on Lithium Valley

Lithium is a critical component for electric vehicle batteries, and Brazil has emerged as an attractive market due to its vast hard rock lithium deposits, which are easier to mine than the salt flats found in Argentina, Bolivia, and Chile. Unlike its South American neighbors, Brazil has maintained a limited state presence in its lithium sector, making it more accessible to foreign investment.

BYD is no stranger to the lithium industry. The company has acquired stakes in major Chinese miners and was one of six firms allowed to bid on a lithium project in Chile last year. It has also outlined plans to build a lithium cathode plant in northern Chile, further solidifying its footprint in the lithium supply chain.

Global Interest in Brazil’s Strategic Minerals

BYD’s acquisition reflects the growing global interest in Brazil as an open market in the geopolitical race for critical minerals. Recent visits by delegations from the U.S., Saudi Arabia, and China have underscored Brazil’s potential as a key supplier of resources essential for the energy transition.

Marc Fogassa, CEO of Atlas Lithium, told Reuters that BYD’s presence in the region validates the area’s potential. "If they invested in these two areas, it’s because they saw the potential, and this obviously makes my areas more valuable," he said.

Challenges and Opportunities

Despite its strategic bet on Brazil, BYD faces challenges in the region. In December 2023, the company was accused of labor abuses at its project to convert a former Ford plant in Bahia, where it plans to produce 150,000 electric vehicles annually.

Moreover, the mining development process in Brazil can be lengthy. According to Luiz Fernando Visconti, a mining sector attorney at Visconti Law, a mining project can take between 8 and 15 years to begin production, provided it is deemed economically viable.

What’s Next for BYD in Brazil?

BYD has hired Minagem Geologia e Mineracao, a local mineral research firm, to advance its projects in Coronel Murta. However, the company has remained tight-lipped about its plans, declining to comment on the acquisition of the mining rights.

By entering Lithium Valley, BYD is not only strengthening its battery supply chain but also consolidating its position in Latin America, a key region for the global expansion of electric vehicles. This move could be a precursor to further investments in Brazil’s lithium industry, as the country emerges as a central player in the transition to electric mobility.