Tesla does its shopping in the Pacific, a 42,000-ton nickel deal

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Tesla methodically continues the process of sourcing raw materials to produce the batteries for its cars. After announcing in June that it will spend $ 1 billion annually on lithium supplies to Australia, it closed a nickel deal in New Caledonia, in the South Pacific, east of the Australian city of Brisbane. The contract with Prony Resources calls for the purchase of 42,000 tons of nickel as part of a multi-year plan, a deal that will make the mining company a key supplier of the metal to the Californian electric car maker.

Prony, which bought the loss-making operations in France’s overseas territory from Brazil’s Vale this year, added that it aims to produce 44,000 tons of nickel by 2024, double what was expected for 2021. New Caledonia is credited with owning 25% of the world’s nickel stocks. From the extraction processes, N-heterocyclic carbenes are obtained, composed of 37% nickel and 2 to 3% cobalt.

For producers of electric vehicles, it is a top priority in terms of costs and certainty of supply to ensure sufficient supplies of raw materials, in this case of nickel, sustainable and low-carbon (but for the moment the energy that powers the mine comes from a coal-fired power plant; Prony’s goal is to be carbon neutral by 2040 thanks to solar power). The deal will make Tesla by far Prony’s largest customer, CEO Antonin Beurrier said. The volume of 42,000 tons is indicative and could vary, he said, refusing to specify the duration or other details of the agreement. The supply agreement with Tesla was negotiated by commodity trader Trafigura, a Swiss company, a 19% shareholder of Prony Resources, and signed last month.

Vale’s Brazilians took over the mine in 2007 in a multibillion-dollar acquisition in hopes of increasing production to 40,000 tons of nickel per year. The project was hampered by the locals, who also came to sabotage the plants. The mine has therefore caused losses in Vale due to the instability of production and uncertainty about the future. Finally, the sale at the beginning of 2021 to the consortium that sees Caledonian interests protected: they control 51%, of which 30% with the SPMSC – Societé de partecipations minières du Sud Caledonien, 50% of the Northern provinces and 50% of the Southern province – and 21% divided between Prony Resources employees (12%) and the local population (9%). Compagnie Financière de Prony, which brings together industrial investors, clients and the management of Prony Resources, is a 30% shareholder.

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Tesla shopping Pacific #42000ton nickel deal

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