Ningde Times’ Back-up Plan

For instance, CATL has also introduced new pricing agreements with its automotive OEM partners. Under the agreement, a portion of the automakers’ battery purchases is priced based on a lithium carbonate benchmark of 200,000 RMB per ton, while the remainder is priced at prevailing market rates—where domestic battery-grade lithium carbonate was then quoted at 480,000 RMB per ton. However, acceptance of this concessionary agreement comes with conditions: automakers must commit to sourcing no less than 80% of their battery requirements from CATL over three years and pay a certain percentage of the contract value as an advance. Back when He Xiaopeng personally camped out at CATL’s factories to secure battery supplies, automakers would have eagerly signed such contracts. But today, conditions, environments, and dynamics have all changed. CATL is no longer the undisputed ‘King of Power Batteries’ it once was. Multiple automakers have established in-house battery companies, and other battery suppliers have also secured significant OEM partnerships. Although CATL still enjoys strong collaboration networks, its recent controversial moves have unsettled partners—and even spooked capital markets—making it, for a time, a company many prefer to avoid. How to break this impasse has thus become CATL’s most urgent priority. 2. Seeking Opportunities Abroad The first development that warrants serious concern is CATL’s move to acquire lithium resources in Brazil. The Brazilian lithium project is indeed highly attractive. The Grota do Cirilo spodumene project—the largest and highest-grade hard-rock lithium deposit in the Americas—holds total resources of approximately 3.032 million tons LCE (lithium carbonate equivalent), grading 1.45% Li₂O. According to plan, the Grota do Cirilo spodumene project commenced trial operations in December 2022. Phase I is expected to produce 270,000 tons annually of high-purity, battery-grade spodumene concentrate—equivalent to roughly 36,700 tons LCE per year. Moreover, based on updated geological resource assessments, Sigma Lithium estimates the project could yield 768,000 tons of spodumene concentrate (104,000 tons LCE) between Years 2 and 8 of operation. Sigma Lithium—a Canadian mining company operating lithium extraction in Brazil’s Jequitinhonha Valley, Minas Gerais—is developing the Grota do Cirilo project as its flagship asset. On December 18, 2023, Sigma announced that negotiations regarding the sale of its business had entered the final stage. While the deal was originally expected to close before year-end, the board now anticipates completion in 2024. According to Exame IN’s investigation, two consortia are currently in the final stages of acquisition talks. CATL and Volkswagen Group are viewed as the most likely bidders. Tesla reportedly attempted to engage Sigma but failed to make progress. As of now, Sigma trades on the Canadian Securities Exchange at a valuation slightly above USD 3 billion; its share price has declined 15% year-to-date amid falling lithium prices. This situation places Zeng Yuqun under intense pressure—not only to assess the long-term strategic value of the lithium resource, but also to anticipate Volkswagen’s bidding ceiling. For Zeng—who has long grappled with domestic market-cap concerns—this may be the perfect moment to check into a hotel, rest his feet, and clear his head.

The Battle for Brazil’s Lithium Mines: BYD Directly Challenges ‘The King of Batteries’?

With accelerated lithium mine development in recent years, Brazil is poised to become the world’s fourth-largest lithium producer within a year. Its Grota do Cirilo lithium mine has drawn keen interest from industry leaders—including CATL and BYD—and is currently shaking up the global lithium-ion battery supply chain. The Grota do Cirilo lithium mine is developed by Sigma Brazil, a subsidiary of Canadian mining firm Sigma Lithium. Previously, Tesla, CATL, and Volkswagen had all expressed interest in acquiring Sigma Lithium. According to the Financial Times, BYD has recently joined this ‘bidding war.’ On January 16, Times Finance contacted BYD for verification regarding its potential acquisition of Sigma Lithium; BYD declined to comment. Earlier, a CATL representative told Times Finance, “Please refer to the Company’s official public statements.” In 2022, soaring lithium carbonate prices and acute supply shortages triggered a global scramble for lithium resources—prompting battery makers and automakers alike to follow mining firms into upstream investments. Although lithium carbonate prices have plunged over the past year, for industry leaders like CATL and BYD, investing in lithium mines remains a critical step toward vertical integration and supply-chain resilience. Against the backdrop of limited domestic lithium resources and expanding overseas operations, battery and auto giants are expected to continue aggressively securing overseas assets. Which corporate ‘rumor’ will ultimately materialize into a deal with Sigma Lithium? An answer may emerge by mid-February. Brazilian media outlet Exame reports Sigma Lithium aims to finalize the sale agreement before the start of the Chinese New Year holiday on February 10. 01 Persistent Rumors Sigma Lithium is developing the Grota do Cirilo lithium mine in Brazil. After six years of development—from concept to reality—the mine began production in 2023 and shipped 20,000 tons of ‘triple-zero green lithium’ (zero tailings, zero hazardous chemicals, zero carbon emissions) to Glencore in November of that year. In earlier years—before any actual output—Sigma Lithium was dubbed a ‘PPT lithium company.’ Yet once production commenced, it quickly became a coveted target for global industrial giants. Media reports indicate that, to date, Tesla, CATL, and Volkswagen have all expressed acquisition interest—and BYD has recently joined the list. Tesla was the first company rumored to be pursuing Sigma Lithium. In February 2023, Bloomberg cited insiders reporting that Tesla was consulting potential advisors about acquiring Sigma Lithium. At the time, private equity fund A10 Investimentos—holding 46% of Sigma Lithium—was actively seeking buyers. Before this rumor solidified, however, Sigma Lithium itself began dropping hints. In November 2023, Sigma Lithium CEO Ana Cristina Cabral stated that several of the world’s most respected companies in battery materials and electric vehicles—including automakers and battery manufacturers—had shown strong interest in its business. A month later, new names emerged in the rumor mill: CATL and Volkswagen.

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