According to a report, Tesla Inc. (NASDAQ: TSLA) is working on a collaboration with a Canadian mining company to help develop a mine that would provide Tesla a source for low carbon nickel that is used in its lithium-ion batteries.
In the company’s mission statement presented by Elon Musk, it is stated that the company’s aim, apart from manufacturing eco-friendly cars, was to achieve environmentally friendly means of production.
A recent report by the Financial Times revealed that Tesla was partnering up with Glencore, commodity miner and trader, to purchase cobalt. However, the electric car company still requires nickel, which is also used in their car batteries.
A report by Reuters shows that the company has the capacity to produce 200,000 electric vehicles in Shanghai and 490,000 in the United States. For the production, a huge amount of battery minerals will be needed.
Earlier in July, the Tesla CEO stated that the company would award a huge contract that would last a long period of time to any firm that could mine nickel, both efficiently and in an environmentally conscious way.
Most of the world’s nickel, about 800,000 tons, currently comes from Indonesia. However, it is reported that the mining processes usually dispose of mining waste in the ocean.
In the coming years, it is expected that the demand for nickel will increase, as other companies and agencies start to use it in a bid to cut down on the harmful emissions produced by fossil-fuel vehicles.
Over the next decade, electric vehicle sales are also predicted to increase, with a forecast suggesting that the demand for nickel will grow from 139,000 tons to roughly 1.4 million tons by the year 2030.
Giga Metals Corp. (TSX.V: GIGA) (OTCQB: HNCKF), the company that will be partnering up with Tesla, has discovered an eco-friendly way of producing nickel. Their low carbon nickel plans involve turning waste from the company’s mining operations into a cement-type rock through the use of carbon dioxide that is in the atmosphere.
Martin Vydra, the company’s president, declined to comment on any meetings with Tesla. He however stated that Giga Metals was actively engaged with automakers about their ability to produce carbon-neutral nickel.
Giga Metals is planning to produce 2,000 tons of cobalt and 40,000 tons of nickel every year for 20 years. This would be more than sufficient to power thousands of electric vehicles. According to the company’s website, their Turnagain mine has shown resources of 141,000 tons of cobalt and 2.36 million tons of nickel.
The Turnagain deposit is said to be clean of impurities and relatively young at about 1 billion years old, so high recoveries of cobalt and nickel are expected.
Experts say this developing story is likely to be closely watched by other mining sector players like GoldHaven Resources Corp. (CSE: GOH) (OTCQB: ATUMF).