EV makers are suffering the sky-high lithium prices
China's biggest EV maker BYD (002594;1211:) is in talks to acquire six African lithium mines, according to Chinese media company The Paper, citing people familiar with the matter.
The insider said BYD estimated that these mines have over 25 million tons of lithium oxide at 2.5% grade, meaning up to 1 million tons of lithium carbonate. Besides, the estimated price of lithium carbonate was lower than CNY 200,000 (USD 29,850) per tone.
Soochow Securities projects that making a 60 GWh battery-electric car consumes 36kg of lithium carbonate. Based on this, the lithium exploited from the six mines would be able to produce 27.8 million units of electric cars.
BYD set its goal to sell 1.5 million electric vehicles in 2022, meaning the ore may be sufficient to support BYD's production capacity for the next ten years.
The source also said that several mines could begin to ship ore to BYD as early as July, estimating they would be used as the raw material for ''blade battery'' production in the third quarter of this year.
For years, the Shenzhen-based EV maker has been securing the supply of lithium. It invested in a lithium miner named Tibet Mineral Development in 2010, and the lithium digger Shengxin Lithium also disclosed to have BYD as its strategic investor in March 2022.
Other Chinese lithium mining companies include Jiangxi Ganfeng Lithium, Tianqi Lithium and Jiangxi Special Electric Motor Co Ltd.