Tesla methodically continues the process of hoarding raw materials to produce batteries at the source. 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 under 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 French overseas territory from Brazil’s Vale this year, added that it aims to produce 44,000 tons of nickel by 2024, double the production forecast for 2021. New Caledonia is credited. to own 25% of the world‘s nickel stocks.
For electric vehicle manufacturers, it is a top priority in terms of costs and certainty of supply to ensure sufficient supplies of sustainable and low-carbon raw materials, in this case nickel. The deal will make Tesla by far Prony’s largest customer, said Antonin Beurrier, CEO and president of Prony. 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 deal with Tesla was negotiated by Singapore-based commodity trader Trafigura, a 19% shareholder in 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 which sees the Caledonian interests protected (51% of which 30% for the SPMSC – Societé de partecipations minières du Sud Caledonien, 50% of the Northern provinces and 50% from 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. Prony intends to replace the current coal-fired power plant with a solar power plant in order to become carbon neutral by 2040.