Will Tesla take over lithium miner Sigma?
Tesla seems to be looking into a possible takeover of the Canadian mining company Sigma Lithium. According to insiders, Tesla has been talking to advisors about a possible bid. However, the US Company is not the only interested party.
Bloomberg first reported the news. However, Tesla is also considering other mining options, which is why it is still unclear whether the two parties will reach a deal. It is also unclear which other mining companies or options the EV maker is looking into.
Sigma’s largest investor, Brazilian private equity fund A10 Investimentos, has been looking into a possible sale of its stake of around 46 per cent. According to Bloomberg’s informants, negotiations about a deal could stall, as Sigma’s share price tripled in the past twelve months. The shareholders’ price expectations are likely to be correspondingly high. And in addition to Tesla, major commodity companies may also be interested in buying Sigma.
Current talks primarily aim to better assess the market value of shares and decide on an optimal time for the exit. According to Bloomberg, shareholders could also wait until the company’s main project is further developed to then achieve the desired price.
Sigma Lithium is mining lithium in Brazil. After studies at Grota do Cirilo showed that recoverable lithium volumes there are 63 per cent greater than previously thought, Sigma Lithium had set its sights on tripling production in 2024. One of the customers is LG Energy Solutions. The South Korean battery manufacturer signed a long-term offtake agreement for battery-grade lithium concentrate in late 2021.
Sigma Lithium is listed on the Toronto Stock Exchange. With the rising lithium prices, the company’s stock market value rose to 4.2 billion Canadian dollars or 2.9 billion euros.
Lithium is in high demand among EV manufacturers, and several investments in the area have been announced lately, with General Motors being among the latest. Mexico also announced plans to nationalize their lithium deposits in order to keep the profits in the country today. At the same time, India recently discovered major lithium deposits in their nation, while Vulcan Energy and Rock Tech Lithium are mining for lithium in Germany.