BHP’s Australian nickel to power Tesla electric vehicles

Top Australian miner BHP has struck a deal with Elon Musk’s Tesla, the world’s biggest electric car maker, to supply the nickel needed in its batteries.

Following months of talks, Tesla has agreed to source the key electric battery material from BHP’s Nickel West mining, smelting and refining operations in Western Australia, the companies said on Thursday.

“Demand for nickel in batteries is estimated to grow by over 500 per cent over the next decade, in large part to support the world’s rising demand for electric vehicles,” BHP chief commercial officer Vandita Pant said.

“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.”

Nickel is a key component for the cathodes of electric vehicle batteries and makes them more energy-dense.

Although nickel accounts for a very small part of BHP’s portfolio, the miner’s chief executive Mike Henry has made a priority of seeking to increase exposure to so-called “future-facing” commodities including nickel and copper that will be increasingly required to meet the world’s evolving needs.

BHP has been seeking to expand its Nickel West unit after reversing plans to sell the assets, which had once been deemed “non-core” to its portfolio. The majority of BHP’s nickel division now sells into the electric car market rather than the stainless steel industry.

Robyn Denholm, Tesla’s Australian-born chairwoman, last month declared Tesla was on track to spend more than $1 billion a year on Australian-mined lithium, nickel and other metals needed to make batteries and vehicles, but warned the country was missing out on a far more valuable role in the global supply chain.

While Australia is rich in reserves of battery raw materials, large amounts are typically shipped thousands of kilometres away to be processed and turned into higher-value products such as battery cells in China and other Asian countries due to an absence of a strong local refining sector.

Car companies around the world have been seeking to diversify their battery minerals supply chains to lessen their dependence on China.

As big miners come under growing pressure from investors and wider society to better align their businesses with global efforts to combat climate change, BHP has been seeking to clean up its assets and its image, including reducing its exposure to thermal coal, the world’s most carbon-intense energy source. Last month, BHP sold its stake in Colombia’s Cerrejon mine to Swiss miner Glencore and is in talks to sell its last remaining thermal coal asset at Mt Arthur in NSW.

Speculation has also been building this week that the miner is considering divesting its oil and gas assets, too, as part of the broader push to decarbonise.

Extracted from The Sydney Morning Herald

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