Tesla partners with nickel mine over fears of shortage

#ElonMusk #Tesla

New Caledonia is known to be the fourth-largest producer of nickel
Nickel is key element used in the making of lithium-ion batteries used in electric cars
Tesla will only have a partnership and not a stake in the region

Written By:Mallika

Updated: March 05 2021 08:15:02 AM ET New Caledonia

In an effort to secure its nickel supply, Tesla has agreed to partner with a nickel mine in New Caledonia on Thursday, as per media reports.

New Caledonia is known to be the fourth-largest producer of nickel in the world.

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This comes after Tesla CEO Elon Musk expressed concerns over nickel shortage last month and back in July 2020 on Twitter. Nickel is a key element used in the making of lithium-ion batteries used in electric cars.

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Nickel is our biggest concern for scaling lithium-ion cell production. That’s why we are shifting standard range cars to an iron cathode. Plenty of iron (and lithium)!

— Elon Musk (@elonmusk) February 25, 2021

Nickel is the biggest challenge for high-volume, long-range batteries! Australia & Canada are doing pretty well. US nickel production is objectively very lame. Indonesia ?? is great! https://t.co/0MeEE5wRfo

— Elon Musk (@elonmusk) July 27, 2020

Tesla is soon expected to become an advisor for Goro mine in the Pacific island, a French overseas territory owned by Brazilian mining giant Vale, reported Business Insider.

As per an agreement with the New Caledonian government, Tesla would be buying nickel for its battery production and helping with the product and sustainability standards, Reuters reported.

Tesla will only have a partnership and not a stake in the region as the primary reason behind this deal is securing its nickel supply.

The region has been experiencing major unrest since December because the French State and Vale decided to sell the nickel mine to Trafigura, a Swiss commodity trader.

Vale was forced to shut the site in December as protests from pro-independence groups intensified.

Reuters cited an agreement that showed that a 51% stake may be held by New Caledonia’s provincial authorities and other local interests in the Vale operations. Trafigura may have a 19% stake, reduced from the original 25% following protests. Tesla will only be partnering, as mentioned earlier.