Tesla Eyes Brazilian Lithium
Something big is brewing in Brazil for Tesla.
According to a recent report from Bloomberg, the EV maker is considering purchasing Lithium mining company Sigma Lithium for about $3 billion USD.
Sigma Lithium is currently one of the biggest extractors of the important mineral, and have been in business since 2018 - in fact, Tesla attempted to cut a deal with Sigma Lithium back in 2019 in order to gain access to the company’s massive lithium deposit for their batteries.
Currently, both companies have refused to comment - with Tesla’s representatives going so far as to tell Bloomberg that these were only rumours. But it certainly makes sense.
Aside from Tesla’s previous relationship with Sigma Lithium, the company’s site - one of the largest lithium deposits in the Americas - is located close to a major Atlantic port, making export a cinch, even if they can’t ship it somewhere close - like Mexico.
Right now Tesla is debating whether to build their next major facility in Canada or Mexico - and the Mexican government seems convinced Tesla is only days away from announcing the win for them. If that’s the case, then this deal with Sigma Lithium looks way more likely to be a reality - as shipping raw minerals to Mexico is way easier than moving them all the way up the eastern coastline to Canada.
And of course, it’s been said a lot, but Tesla is really on the hunt for the chance to get into the Lithium business. CEO Elon Musk has said repeatedly that Tesla’s only choice to keep the cost of battery production down was to bring the whole cycle in-house by purchasing a mine and building a refining facility of their own.
And we shouldn’t forget that Tesla has a proposed Lithium refining facility currently waiting for full approval in Corpus Christi, Texas.
It’s likely that the companies don’t want to go public just yet because they’re still in the negotiation process, and that’s fair enough - but this deal certainly seems like it would make a lot of sense for both companies.
Tesla needs Lithium, and with the EV maker’s plans for expansion over the next few years, no mine would be smart to turn away such a steady customer.