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July 23, 2021

Tesla signs nickel supply agreement with BHP

An EV maker has moved to secure battery materials supply, from Australia.

By Graeme Roberts

Tesla has signed an agreement with Anglo-Australian mining company BHP Group to supply nickel for its electric vehicle (EV) batteries.

The deal would help the world’s largest electric vehicle manufacturer secure future supplies of the raw material, which is essential in the manufacture of lithium-ion batteries, although the duration of the contract was not disclosed.

The nickel would be supplied from BHP’s Nickel West mine in Western Australia.

Nickel now is used mainly to make stainless steel but demand from global lithium-ion battery producers is growing rapidly and this was expected to put significant pressure on future supplies of the raw material.

BHP chief commercial officer, Vandita Pant, said in a statement he expected demand for the material to grow by over 500% over the next decade, due mainly to growth in demand for EV batteries.

The agreement between Tesla and BHP came as the US government under President Joe Biden urged US manufacturers to develop supply chains that were not overly dependent on raw materials and production in China, due to the volatile diplomatic relations between the two countries.

Tesla recently signed a similar supply deal with Brazilian mining company Vale to supply nickel from its Goro mine on the Pacific island of New Caledonia.

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