TOKYO, March 28 (Reuters) - Mitsui & Co ( MITSF ) said on

Thursday it will spend $30 million to take a 12% stake in

U.S.-based Atlas Lithium ( ATLX ) to venture into Brazil's

lithium mines to tap demand for the battery mineral.

The deal by the Japanese trading house follows a similar one

unveiled by rival Mitsubishi Corp ( MSBHF ) this month to buy a

stake in the PAK lithium project of Canadian miner Frontier

Lithium ( LITOF ).

Mitsui ( MITSF ) said it would subscribe to a $30 million

third-party allocation of new shares by Atlas and gain the right

to offtake lithium spodumene concentrate.

Atlas is developing the Neves project in Brazil's

Lithium Valley in the state of Minas Gerais. It is one of the

largest lithium tenement holders in Brazil.

The Neves project is expected to start production of

spodumene concentrate in the fourth quarter of 2024, with annual

production to reach 300,000 metric tons after an expansion in

late 2025, enough to be used in about 1 million electric

vehicles (EVs), Mitsui ( MITSF ) said.

Mitsui ( MITSF ) will offtake a total of 315,000 tons of

concentrate in about 5 years.

"As Atlas owns more than 50 blocks in the valley, we see

the upside potential," Akinobu Hashimoto, general manager of

Mitsui's ( MITSF ) new metals & aluminium division, told reporters.

He highlighted the short period from investment to

production initiation and the lower development costs compared

to those in Australia as key attractive points.

The deal marks Mitsui's ( MITSF ) first investment in lithium and

comes as part of its strategy to build battery material value

chains encompassing development, production, and recycling.

Mitsui ( MITSF ) aims to expand its lithium portfolio by engaging

in additional upstream and conversion projects, while also

eyeing investments in other battery minerals such as nickel and

manganese, Hashimoto said.

The deal is set for completion in April.