Tesla said to consider buying Canadian miner Sigma Lithium

Canada-based Sigma Lithium Resources saw its US-listed shares rise 21 percent in aftermarket trading on Friday following a report that Tesla was considering buying the firm, which mines materials used in EV batteries.

Bloomberg reported the electric carmaker was considering a takeover of Sigma Lithium as demand for the materials vastly outpaces supply.

Tesla has been speaking with potential advisers about a bid, the report said, citing unnamed sources. Sigma Lithium is one of several options the EV manufacturer is looking into as it considers carrying out its own refining, one of the report’s sources was cited as saying.

Negotiations are in the early stages and may not lead to a deal, the report said.

One barrier to a buyout is Sigma Lithium’s high share price, which has tripled in the past 12 months as EV makers search for supplies of battery materials.

The firm is developing a lithium rock deposit in Brazil called Groto do Cirilio and said in December mineral reserves there were 63 percent higher than previously thought.

The company plans to open the mine by April to produce spodumene concentrate, which can be used to produce the lithium hydroxide metal preferred by Tesla, BMW and some other carmakers.

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