Tesla, BHP strike revolutionary nickel deal
Beyond nickel, companies forge sustainable mining alliance Metal Tech News - July 22, 2021
Last updated 8/3/2021 at 3:23pm
Answering Tesla Inc. CEO Elon Musk's call for new supplies of nickel that are mined "efficiently and in an environmentally sensitive way," Anglo-Australian mining giant BHP Group has struck a deal to supply the electric automaker with this fundamental lithium-ion battery ingredient from its Nickel West operation in Western Australia.
"We are delighted to sign this agreement with Tesla Inc., and to collaborate with them on ways to make the battery supply chain more sustainable through our shared focus on technology and innovation," said BHP Chief Commercial Officer Vandita Pant.
While BHP and Tesla did not provide details on how much nickel this deal entails, global lithium-ion supply chain market analyst Benchmark Mineral Intelligence estimate that the contract is worth up to 18,000 metric tons of nickel per year starting in 2022.
"It adds to two more nickel supply deals that Tesla has likely secured to lock up its expected demand from 2022 onwards with Prony Resources and Vale," the London-based firm penned in a July 22 article.
Benchmark forecasts that by 2030 it will take roughly 1.7 million metric tons of nickel to meet the demands of global battery supply chains, a more than 900% increase over the 184,000 metric tons being required for batteries this year. As a result of this skyrocketing demand, coupled with normal non-battery growth, the analyst anticipates that global needs for nickel will roughly double over the next decade – from roughly 2.4 million metric tons this year to nearly 5 million metric tons in 2030.
It is this growth story, coupled with nickel's importance to making EV batteries, that Musk urged, "Please mine more nickel."
"Tesla will give you a giant contract for a long period of time if you mine nickel efficiently and in an environmentally sensitive way," the Tesla CEO added. "So, hopefully, this message goes out to all mining companies – please get nickel."
BHP got the message.
"The investments we have made in our assets and our pursuit of commodities like nickel will help support global decarbonization and position us to generate long-term value for our business," said BHP Minerals Australia President Edgar Basto.
The company's Nickel West operation, which includes mines and a refinery that produces premium-grade nickel, also meets the efficiency and environmental criteria put forward by Musk. This is largely due to the sulfide nature of the ore at BHP's Western Australia mines, which is more easily converted to the battery-grade nickel sulfate than the laterite ores. While laterite ores are ideal for making stainless steel and other alloys, they require a costly and environmentally questionable high-pressure acid leach (HPAL) process to produce battery-grade nickel sulfate.
BHP says roughly 85% of its nickel is now going to battery makers and it is nearly finished with the construction of a plant at Nickel West to efficiently produce environmentally friendly nickel sulfate needed in the lithium-ion batteries that power Teslas and other EVs.
"BHP produces some of the lowest carbon intensity nickel in the world, and we are on the pathway to net-zero at our operations," said Basto. "Sustainable, reliable production of quality nickel will be essential to meeting demand from sustainable energy producers like Tesla Inc."
In addition to the nickel supply pact, BHP and Tesla are working together to make the overall lithium-ion battery supply chain more sustainable.
This battery sustainability partnership is focusing on mine-to-EV raw material traceability using blockchain, technical exchange for battery raw materials production, and promoting the importance of sustainability in the resources sector – including identifying partners who are most aligned with BHP and Tesla's principles and battery value chains.
"This is an alliance that will promote sustainability in the mining and resources sector," said Samantha Langley, principal of business development at BHP.
The global mining and EV companies are also working together to identify opportunities to lower carbon emissions in their respective operations through increased use of renewable energy paired with battery storage.
More succinctly, Langley said, "We are at the beginning of a revolution that will transform our world."