Electric vehicle giant Tesla (NASDAQ: TSLA) is reportedly considering the acquisition of Canadian miner Sigma Lithium (NASDAQ, TSX-V: SGML), as per recent news reports. The company, led by Elon Musk, is exploring various mining opportunities as it evaluates options for its own refining processes. Sources close to the matter have indicated that Tesla has been in discussions with potential advisers regarding a potential bid.
Sigma is set to commence commercial production from its Grota do Cirilo project in Brazil this April. The project will produce spodumene concentrate, a key material used in the production of lithium hydroxide for EV batteries. Additionally, Tesla recently secured a supply deal with Piedmont Lithium for spodumene concentrate from Quebec, starting later this year.
Tesla is among a handful of automakers considering investments in mining to secure a stable supply of metals essential for EV batteries. General Motors Co. is reportedly vying for a portion of Vale SA’s base metals unit and has also acquired a stake in Lithium Americas Corp to aid in the development of a mine in Nevada, USA.
While reports of Tesla’s interest in Sigma have surfaced, there has been no official confirmation from Mr. Musk or Tesla representatives. Similarly, Sigma’s co-chair and co-CEO, Ana Cabral-Gardner, has refrained from commenting on the speculations.
Sigma, a battery metals miner, is in the final stages of development of its Grota do Cirilo project in Brazil. The project, the largest lithium hard rock deposit in the Americas, has been producing battery-grade lithium concentrate on a pilot scale since 2018. The construction of a larger commercial mine is nearing completion and is anticipated to be operational in April.
With A10 Investimentos holding a 46% stake in Sigma, the company’s largest investor, there have been discussions about a potential sale. A10 Investimentos, a Brazilian private equity fund partly founded by Mr. Cabral-Gardner, has been assessing interest from mineral companies and automakers. However, potential buyers may be cautious due to Sigma’s shares tripling in value over the past year. The owners of Sigma may also choose to further develop Grota do Cirilo before pursuing an exit strategy.
