Tesla is reported to be considering buying Brazil-based company Sigma Lithium, which is currently valued at $3 billion.
With the costs of key minerals rising rapidly for battery production, Tesla is considering venturing into the world of mining.
For example, in response to the rising cost of lithium, CEO Elon Musk said last year that Tesla “may” now get into the lithium mining business, even though it’s already supposed to be in it.
At Tesla’s Battery Day event in 2020, the automaker announced it was getting into the mining business — starting with the purchase of 10,000-acre lithium claims in Nevada.
More than two years later, Tesla has yet to do anything with that claim or the new lithium mining technology announced at the same event.
However, the company has begun refining lithium with a new plant under construction outside of Corpus Christi, Texas.
In order to get into the mining business, Tesla said it might actually consider an acquisition, something the company doesn’t do very often — especially on a large scale.
Now a new report puts a potential acquisition target on the map: Sigma Lithium.
The people, who asked not to be identified while discussing classified information, said the electric vehicle maker run by Elon Musk has spoken with potential advisers about an offer. One person said that Sigma Lithium is one of several mining options that Tesla is exploring as it considers its own refining.
According to the report, Sigma Lithium’s largest shareholder, A10 Investimentos, a Brazilian private equity fund, is considering lobbying to sell the company; They are currently talking to potential bidders, and Tesla is one company that has expressed interest.
Sigma declined to comment on the report, claiming it was a rumour.
The company’s flagship project is large lithium mining projects in Minas Gerais, Brazil, along a corridor known to contain large deposits of lithium.
It is still in the development stage, but they have achieved pilot scale production, and are transitioning to commercialization with the goal of producing 766,000 tonnes (104,200 tonnes LCE) per year.
Sigma Lithium’s share price has tripled over the past year, making it a more difficult target for a takeover. The stock also rose 24% in aftermarket trading after the report that Tesla was interested in acquiring it.
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