Chile gave two of the five lithium mining contracts to BYD Chile SpA and Serviciosy Mineras delNorte.

(Image credit: BYD)

It was reported yesterday that BYD has been awarded a lithium mining contract in Chile. The company confirmed this today.

A report in China Securities Journal today noted that media reports mentioned Chile gave two of the five lithium mining contracts to BYD Chile SpA and Serviciosy Mineras delNorte.

BYD offered $61 million and Serviciosy Opperciones offered $60 million, with each contract awarding a quota of 80,000 tons of lithium production over 20 years.

China Securities Journal quoted unnamed BYD sources as saying the news is true.

Chile's Mining and Energy Ministry announced the award of the contracts in a statement, saying they represent about 1.8 percent of Chile's known lithium reserves, according to a Bloomberg report.

Winners will still have to undertake exploration work and go through all the usual permitting before they can develop projects, the Bloomberg report noted.

The move comes as sales of NEVs continue to reach record highs and the price of raw materials used in batteries has risen sharply.

BYD previously participated in setting up a mining company, extending its reach in the sector.

On December 30, Sichuan Shuneng Minerals Co was established with a registered capital of 500 million yuan, information from data provider Tianyancha shows.

The company has four shareholders, with the largest shareholder being Sichuan Road & Bridge Co Ltd, with a 67 percent stake, and BYD holding 1 percent, the information shows.

The company's business scope includes mineral resources mining, exploration, mineral processing, recycling, new materials technology research and development, metal and non-metal mineral resources exploration, non-metal mineral products manufacturing, and new construction materials manufacturing.

BYD, as China's largest maker of NEVs, is also one of the largest makers of power batteries.

Data released yesterday by the China Automotive Battery Innovation Alliance shows BYD ranked second with 25.06 GWh of power batteries installed in 2021 and a market share of 16.2 percent.

CATL, the supplier of Tesla and Nio, continued to dominate the market with 80.51 GWh of power batteries installed in China in 2021, capturing 52.1 percent of the market share.