Tesla in Talks to Buy Glencore Cobalt for Shanghai Car Plant – by Mark Burton and Thomas Biesheuvel (Bloomberg News – January 15, 2020)

https://ca.finance.yahoo.com/

(Bloomberg) — Glencore Plc is negotiating a long-term contract to ship cobalt to Tesla Inc.’s new electric-vehicle factory in Shanghai, according to people familiar with the matter.

A deal would help Tesla avoid a supply squeeze on the key battery metal as it pushes into the world’s largest car market, and mark a win for Glencore after a tough spell for its cobalt business.

Executives from both companies hammered out terms of the deal before an official ceremony to mark the first sales from the Shanghai plant earlier this month, said one of the people, who asked not to be identified discussing commercial negotiations. They declined to give details about the size and value of the supply deal.

A Glencore spokesman declined to comment, while a representative for Tesla didn’t immediately respond to a request for comment. The contract will help Tesla shore up its cobalt supply as it ramps up output at the so-called Gigafactory, which was built in just 11 months with significant support from the Chinese government.

The opening of the plant has helped propel Tesla’s shares to record highs, as investors turn bullish on Elon Musk’s ambitions of transforming the company into a global mass-market automaker.

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