Global EV Maker Move in Brazil Unlocks New Value for Lithium Company

1. Atlas Lithium Corp. is a billboard sponsor of Streetwise Reports and pays SWR a monthly sponsorship fee between US$4,000 and US$5,000. 
2. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Atlas Lithium Corp.
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The newly-discovered presence of BYD, the world's largest EV maker, in Brazil's Lithium Valley significantly enhances the strategic value of neighboring Atlas Lithium Corp. (ATLX:NASDAQ) properties as the company continues to expand its footprint in the area Atlas CEO Marc Fogassa commented on BYD's acquisition, stating in the announcement, "If they invested in these two areas, it is because they saw the potential, and this obviously makes my areas more valuable." 

Atlas holds Brazil's largest hard-rock lithium exploration portfolio, with 85 mineral rights covering 468 square kilometers in Brazil's Lithium Valley alone. Its flagship Minas Gerais Lithium Project has already received all necessary permits for assembling its modular processing plant, which is expected to arrive in Brazil in early March 2025. The company also benefits from existing strategic partnerships with global players such as Mitsui & Co., Chengxin, and Yahua, strengthening its ability to meet the rising global demand for lithium concentrate.

Lithium Sector Overview: Tightening Supply, Global Expansion, and Strategic Shifts

The global lithium sector entered 2025 with signs of a tightening market following years of oversupply and price declines. According to a January 14 report by USA News Group, industry analysts forecasted a significant reduction in lithium carbonate equivalent (LCE) surplus from nearly 150,000 tonnes in 2024 to around 80,000 tonnes in 2025. Benchmark analysts projected that an investment of US$116 billion would be required by 2030 to meet electric vehicle (EV) production targets and avert future supply shortages.

The global demand for lithium remained strong, driven primarily by EV production and energy storage needs. Precedence Research estimated that the global lithium market could reach US$28.45 billion by 2033, growing at a compound annual growth rate (CAGR) of 12.5%. Additionally, Bank of America forecasted a shift from oversupply to a potential lithium deficit by 2027, with 2025 likely representing the peak of the current surplus.

Geopolitical shifts also played a role in the lithium sector's outlook. On January 15, Cecilia Jamasmie of Mining.com reported that Saudi Arabia had launched a new joint venture between Aramco and Ma'aden to scale up lithium production by 2027. Nasser al-Naimi, Aramco's president of exploration and production, stated, "We expect that this partnership will leverage the world's leading upstream enterprise . . . with a view to meeting the kingdom and potentially the world's projected lithium demand."

Market conditions remained volatile, as reported by Fastmarkets on February 5. Their projections showed global lithium production reaching nearly 1.2 million tonnes of LCE in 2024, up from just over 737,000 tonnes in 2022. However, slower-than-expected EV adoption rates contributed to persistent oversupply, narrowing the surplus to 154,000 tonnes by the end of 2024. Paul Lusty, head of battery raw material analytics at Fastmarkets, noted, "Lithium market conditions — particularly during the latter part of 2024 — led to growing producer restraint, both in China and elsewhere."

According to a February 24 report by DataM Intelligence, the global lithium market was valued at US$9.3 billion in 2023 and is projected to reach US$38.8 billion by 2031. This growth is expected to occur at a compound annual growth rate (CAGR) of 19.5% from 2024 to 2031. The report highlighted that the increasing demand for lithium stems from its critical role in rechargeable batteries for electric vehicles (EVs) and portable electronics, as well as applications in ceramics, glass production, and renewable energy storage. However, the report also noted significant environmental and geopolitical challenges related to lithium extraction, particularly as global demand continues to rise. The research identified major market players, including FMC, Critical Elements Corporation, and Galaxy Resources Limited, as key contributors to this expansion.

In a significant shift within the energy sector, major oil companies have begun making strategic investments in lithium production. A February 24 report by Petroleum Australia revealed that companies such as ExxonMobil, Equinor, and Rio Tinto have secured lithium assets, particularly in North America. ExxonMobil signed a non-binding agreement with LG Chem to potentially supply up to 100,000 metric tonnes of lithium from its proposed project in Arkansas. Meanwhile, Equinor invested up to US$133 million for a 45% stake in Standard Lithium's projects in Arkansas and Texas, signaling a diversification beyond fossil fuels.

Catalyst: Atlas Positioned for Growth Amid Rising Global Lithium Demand

Atlas Lithium stands to benefit from the heightened international focus on Brazil's lithium assets, spurred by BYD's entry into the market and increased global demand for EV batteries. The company's exploration assets, located next to BYD's newly acquired plots, are already showing promising results.  

The arrival of Atlas's modular processing plant will mark a key milestone, enabling the company to advance its transition from exploration to production. The plant is designed to process up to 150,000 tonnes per year of spodumene concentrate in Phase 1, with plans for expansion based on exploration outcomes from nearby regions. This infrastructure advantage, combined with favorable government permitting policies under Brazil's InvestMinas Program, fast-tracks Atlas's path toward becoming a significant lithium producer. 

Additionally, Atlas's partnerships with Mitsui & Co. and Chengxin/Yahua secure offtake agreements for 135,000 tonnes per year of lithium concentrate during Phase 1 of the Neves project. These agreements not only provide financial stability but also position Atlas as a critical supplier within the global EV supply chain. The company's close proximity to BYD's operations could further enhance its strategic importance, especially as larger players seek reliable lithium sources amid tightening global supply dynamics. 

Lithium Co. Has Opportunity To Create Significant Long-Term Profits

According to a January 28 research note from H.C. Wainwright & Co., analyst Heiko F. Ihle maintained a Buy rating for Atlas Lithium Corporation with a target price of US$19.00. Ihle highlighted the company's low-cost operations in Brazil as a critical factor that could lead to "significant longer-term profits" while offering "geopolitical diversity to major lithium companies." He emphasized that the company's positioning in Brazil provides a strategic advantage, particularly as larger market players seek stable jurisdictions for lithium supply.

Ihle also noted that Atlas Lithium's modular Dense Media Separation (DMS) lithium processing plant had been fully paid for, adding that its compact design and water-efficient recycling systems could help "reduce operating and installation expenses significantly." The plant's Phase 1 production goal of up to 150,000 tonnes of battery-grade spodumene concentrate annually was cited as a major catalyst, with Phase 2 expected to double that capacity, potentially boosting the company's output significantly.

In terms of strategic investments, Ihle pointed out that commitments from Chengxin and Yahua provided US$50 million in funding, including US$10 million in equity and a US$40 million non-dilutive prepayment covering 80% of Phase 1 lithium concentrate production. He also highlighted the US$30 million investment from Mitsui & Co. in exchange for an offtake agreement of 15,000 tonnes of lithium concentrate from Phase 1, followed by 60,000 tonnes annually for five years during Phase 2.

The analyst further explained that recent mergers and acquisitions activity underscored the market's current focus on securing long-term lithium supply from geopolitically stable locations. Ihle remarked that the "low availability of low-cost lithium producers (such as ATLX) should ultimately warrant a strong buyout multiple," even though short-term oversupply concerns might temporarily pressure lithium prices.

Despite these positive outlooks, the report acknowledged some risks, including commodity price fluctuations, technical risks associated with resource definition, and potential cost overruns related to construction at the Das Neves Project. Still, with a share price of US$6.55 at the time of the report, H.C. Wainwright & Co. projected a potential return of 190% based on their US$19.00 target price.

Ownership and Share Structure

About 32% of Atlas Lithium is owned by management and insiders. About 12% of the shareholders are institutional. Strategic partners hold another 12%. The rest, about 44%, is retail. 

Its market cap is approximately US$90 million. It trades in a 52-week range of US$5.17–$20.00.