Tesla in Talks to Acquire Battery Metal Miner Sigma Lithium: Report

Tesla is considering making a bid to amass Vancouver, Canada-based Sigma Lithium, an organization that makes a speciality of mining the critical electric vehicle (EV) battery metal in its name — reports Bloomberg.

Based on the publication’s sources, Tesla has been in talks with potential advisers a few bid for Sigma Lithium. Shares in Sigma Lithium jumped greater than 25% in aftermarket trading on the back of the rumors.

The news comes after Tesla CEO Elon Musk said in April of last 12 months that Tesla might need to start out mining and refining its own lithium at scale to maintain production costs in check because the metal’s price continues to surge as a consequence of growing demand from the automotive sector.

“Price of lithium has gone to insane levels! Tesla might actually need to get into the mining & refining directly at scale, unless costs improve,” Musk said on the time. Sigma is barely one among several options Tesla is entertaining to secure its lithium supply, per sources.

People acquainted with the matter said that the deliberations are still within the early stages and will not even result in a deal. A successful bid becomes much more unlikely considering Sigma’s owners have a fairly high asking price.

Sigma’s owners could also wait to sell until the corporate further develops its foremost project, a big lithium rock deposit in Brazil generally known as “Grota do Cirilo.” The corporate previously said that it could triple lithium production on the project in 2024 after additional mineral reserves were discovered at the location.

Musk and Tesla didn’t reply to Bloomberg‘s requests for comment, while Sigma brushed reports of a possible sale to Tesla off as “rumors.”

The demand and provide gap for lithium is barely growing, together with the metal’s price, because the world accelerates its transition to EVs, contributing to higher production costs. Back in 2021, Tesla filed a patent application for a brand new lithium extraction process that cuts costs by 33%.

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