Tesla’s Musk promises “giant contract” for sensitively, efficiently-mined nickel

Elon Musk, CEO, Tesla

ELON Musk, CEO of Tesla, told mining firms that his company would award “a giant contract” for efficiently mined nickel produced in “an environmentally sensitive way”, said Bloomberg News.

“Tesla will give you a giant contract for a long period of time if you mine nickel efficiently and in an environmentally sensitive way,” Bloomberg quoted Musk as having said during a second-quarter earnings call.

Musk’s plea comes as one of Japan’s general trading giants is about to take a roughly $500m write down on a nickel project in Madagascar because of low prices and the Covid-19 pandemic.

Supplies of battery-grade nickel – a key component in the cathode of an electric vehicle’s battery – could run short as early as 2023, said the newswire. Bloomberg expects a tight balance in the next two to three years as lithium-ion battery demand picks up.

Already, Ambatovy – one of the world’s largest nickel projects, with full operational capacity representing 5% of class 1 nickel global production capacity – hasn’t resumed operations after being suspended in March 2020. An extended suspension will exacerbate the potential tightness in the nickel market, Bloomberg said.

In June, Glencore said it had won a contract to supply cobalt from its Democratic Republic of Congo (DRC) operations to Tesla. The deal, which increases Tesla’s reliance on supplies from the DRC, is a boost for Glencore’s cobalt business after a two-thirds slide in the metal’s price over the past two years to about $30,000 a ton.

Tesla supports sourcing metals from the DRC on the proviso that the materials “… can be assured … are coming from mines that meet our social and environmental standards”.

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