BYD has held discussions with Sigma Lithium about a possible supply agreement, joint venture or acquisition, an executive at the NEV maker said, according to the Financial Times.

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BYD (OTCMKTS: BYDDF) is in talks with a Brazilian lithium producer over a supply agreement to secure access to the raw material that is key to power batteries.

BYD has been in discussions with $2.9-billion-valued Sigma Lithium about a possible supply deal, joint venture or acquisition, the Financial Times said in a report yesterday, citing Alexandre Baldy, BYD's chair in the South American nation.

Sigma, which is listed on Toronto and Nasdaq, began shipping lithium last year from its hard-rock mine and processing plants in Minas Gerais, the report noted.

There was an "active" dialogue with Sigma, Baldy said.

"Different strands are being discussed about supply, a joint venture, an acquisition… nothing is concrete," he added.

BYD met with Sigma CEO Ana Cabral Gardner in Sao Paulo last month, Baldy said, declining to give further details of the talks, according to the report.

Sigma mines lithium spodumene ore and processes it into battery-grade lithium concentrate. It plans to triple its annual capacity to 270,000 tons, the report noted.

Brazil is one of the key markets BYD is focusing on in its overseas expansion, already offering six models there -- Seal, Tang EV, Han EV, Yuan Plus EV, Song Plus DM-i, and Dolphin.

BYD will set up a large manufacturing base complex consisting of three plants in Brazil, the company and the government of the Brazilian state of Bahia jointly announced on July 4, 2023.

The facility, located in the Brazilian city of Camacari, represents a total investment of 3 billion reais ($620 million), according to a statement at the time.

The industrial complex includes a production plant for electric buses and truck chassis, a new energy passenger vehicle production plant, and a processing plant specializing in lithium iron phosphate (LFP) battery materials.

The new energy passenger car production line will be able to produce pure electric and plug-in hybrid models, with a planned annual capacity of 150,000 units.

The LFP battery material processing plant will utilize local port resources to meet the growing demand for new energy products in the global market, BYD said.

The industrial complex is scheduled to start production in the second half of 2024 and is expected to create more than 5,000 local jobs.

BYD sold 341,043 new energy vehicles (NEVs) in December and 3,024,417 for the whole of 2023, according to figures it announced earlier this month.

($1=4.8566 Brazilian reais)

BYD to build industrial complex with three plants in Brazil