Tesla partners with BHP as nickel supplier

BHP HAS announced a new partnership with Tesla that will result in the Australian mining giant supplying the Californian electric vehicle (EV) specialist with nickel from its Nickel West operation in Western Australia.

The nickel will be used in all of Tesla’s battery technology, not just those used to power its EVs.

There is more to the deal than just buy-and-supply, as the two parties plan to collaborate on ways to make the battery supply chain more sustainable – with a focus on end-to-end raw material traceability – as well as energy storage solutions.

According to BHP chief commercial officer Vandita Pant, 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”.

“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,” she said.

While no dollar value of the deal has been made public, the BHP Group’s shares jumped three per cent following the initial announcement on Thursday.

In an independent report prepared by Accenture, the global future battery industry is estimated to be worth $7.4 billion annually to the Australian economy and expected to create almost 35,000 jobs by the end of the decade.

In addition to this, the Western Australian state government has forecast a tenfold increase in demand for batteries in EVs and energy storage systems over the next 10 years.

WA mines and petroleum minister Bill Johnston said the state had the potential “to become a world-leader in the export of future battery minerals and materials”.

“I’m pleased to see the (Future Charge: Building Australia's Battery Industries) report confirm that Australia can compete in the manufacture of battery active materials, an initiative the McGowan Government has already committed to attracting with funding support,” he said in a statement last week.

“Today's announcement not only highlights that Western Australia hosts the best quality raw materials integral to the world's decarbonisation efforts, it also reinforces the level of comfort global brands have in investing in the state knowing that raw materials are responsibly sourced.

“As investors and the community are increasingly holding mining companies to the highest ESG standards and practices, the supply agreement between BHP and Tesla reflects the regulatory framework in place in Western Australia that ensures the sustainable production of battery materials.”

BHP Minerals Australia president Edgar Basto was equally as enthusiastic and said the sustainable, reliable production of quality nickel would be “essential to meeting demand from sustainable energy producers like Tesla Inc”.

Tesla is far from the first big name to source at least some of its raw materials from Australia, with BMW announcing it would be sourcing its lithium from Australia in August last year under a deal with Ganfeng worth €540 million ($865m).