Tesla and BHP Billiton sign nickel agreement to ensure non-Chinese supply


Tesla has agreed to buy nickel from BHP Billiton, the world’s largest miner, for its batteries because it wants to lock in metal supplies that are not controlled by China.

The deal is the third nickel agreement signed in the past eight months after the electric car manufacturer’s deal with the Goro mine backed by Vale and Trafigura, as CEO Elon Musk called for a “sustainable supply”. “nickel.

Musk said in July last year that he would offer a “long-term huge contract” to companies that can mine nickel “efficiently in an environmentally sensitive way.”

Nickel is used to make stainless steel, a key material for Tesla’s long-range cars that need more powerful batteries. BHP Billiton Chief Commercial Officer Vandita Pant said that in the next ten years, the demand for nickel in batteries will increase by 500%.

BHP Billiton stated that the batteries of electric vehicles may contain as much as 40 kilograms of nickel.

But Chinese companies have consolidated their control over most of the nickel production in Indonesia, the world’s largest nickel producer, using coal-fired power generation in the process.

Tesla has been looking for alternative low-carbon suppliers in developed countries. According to the two companies, the electric car manufacturer will purchase nickel from BHP Billiton’s Nickel West plant in Western Australia, which is one of the producers of battery metals with the lowest carbon content.

BHP Billiton did not provide details on the size of the deal with Tesla. Benchmark Mineral Intelligence analyst Caspar Rawles estimates that annual nickel production will be as high as 18,000 tons.

This transaction is because BHP Billiton wants to focus on the commodities and commodities needed for the transition to a low-carbon economy. an examination Options for its oil and gas assets, including sales.

“Our investment in assets and our pursuit of commodities such as nickel will help support global decarbonization and enable us to create long-term value for our business,” said Edgar Barstow, president of BHP Billiton Australia Mining.

In 2019, BHP Billiton changed its decision to sell Nickel West’s assets and instead decided to invest in the production of nickel for the battery industry. Nickel West will produce the first nickel sulfate suitable for batteries this year, which means it does not have to be sent to a Chinese refinery first.

According to BHP Billiton, the Nickel West refinery produces approximately 80,000 tons of nickel each year, enough to produce approximately 2 million electric vehicle batteries.

BHP Billiton said it will also work with Tesla to use the blockchain technology behind Bitcoin to track battery raw materials and cooperate on how to use renewable energy and battery storage to reduce the carbon footprint of its mining business.

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