Nickel remains an integral mineral to make certain electric vehicle (EV) batteries, so it comes as no surprise that Tesla is looking to increase its supply as EVs grow in popularity.
On Wednesday, New Caledonia mining company Prony Resources announced that Tesla agreed to buy 42,000 tonnes of nickel in a multi-year deal with the automaker, effectively making the company a key supplier of nickel for the U.S. company, according to Reuters.
Prony purchased the nickel operation earlier this year from Brazil’s Vale SA, and has since shared plans to produce as much as 44,000 tonnes of nickel by 2024 – twice as much as the company’s estimated 2021 output.
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Tesla will now become Prony’s largest customer by a long shot, according to Antonin Beurrier, the chief executive of the mining operation. The deal was signed last month and was handled through Swiss trader Trafigura, which is also a shareholder in Prony Resources.
This is also not the first time that Tesla has sought out nickel from New Caledonia, having become an adviser on a Goro mine earlier this year.
Tesla CEO Elon Musk recently stated at its 2021 shareholder meeting the company has purchased 26% of all battery cells in the auto industry, despite only having 0.7% marketshare.