Directly from the source: Tesla becomes buyer and advisor for nickel mine in New Caledonia

Tesla CEO Elon Musk recently stated that the scarcest raw material for the production of battery cells is nickel. He therefore wants to equip electric cars with standard ranges, like the Model 3 from China, with lithium iron phosphate batteries, and only the most demanding ones, such as semi and roadsters, with batteries with a high nickel content. But he also needs a lot of the metal for this, and does not seem to want to rely on suppliers: According to a report, Tesla is now acting as a consultant for a mine on the New Caledonia archipelago, which also supplies nickel.

Technology partnership with Tesla

The former French colony of New Caledonia in the southern Pacific has substantial nickel deposits and is one of the largest producers in the world. The mine, from which Tesla is now to be supplied, belongs to the Brazilian raw materials group Vale, which had actually wanted to sell it for a long time. But that led to sometimes violent protests by groups fighting for the country’s independence, which forced the country to close in December. Now, according to the news agency Reuters, an agreement has been reached in which Tesla also comes into play.

51 percent of the nickel mine and processing facilities are expected to be owned by New Caledonian provinces and other local governments, the agency reported Thursday. The Swiss commodities trader Trafigura takes over 19 percent. Tesla is said to have no direct participation, but nickel supplies, and a “technical and industrial partnership” has been agreed with the electric car and soon to be battery manufacturer. Both political sides in New Caledonia agreed to the agreement.

CEO Musk wants clean nickel

According to a report in the Financial Times, the price of nickel rose 26 percent over the past year. The raw material is mainly mined in Russia, Canada, New Caledonia and Indonesia and is mainly needed for steel production, but increasingly also for batteries. New capacity is currently being built primarily by Chinese companies in Indonesia.

Nickel from there may not meet Tesla’s environmental requirements, an analyst told the newspaper. CEO Musk used the conference call on the business figures in the second quarter of 2020 to publicly call for more nickel to be produced. He promised “a huge contract” from Tesla for companies that can provide large quantities of it. However, the Tesla boss restricted that the metal had to be extracted efficiently and in an environmentally friendly manner.


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