In July, Elon Musk, the founder of Tesla, issued an unusual public challenge to the world’s mining industry. Commenting during an investor presentation, he dangled the prospect of a “giant contract for a long period of time” to the firm that could supply responsibly-mined nickel.
Nickel is not particularly in short supply. According to a June report by Australia’s Macquarie Bank, previously forecast deficits in nickel for this year until 2025 are now expected to turn into narrow surpluses. This is partly owing to the impact of Covid-19 disease which has dented consumption more than supply, the bank said.
Availability, however, was not behind Tesla’s request. In a world of improving environmental, sustainability and governance (ESG) standards, it’s peace of mind that’s harder to source than minerals.
The mining industry has been boosted by increased demand for metals such as nickel which are used by industrialists like Musk for the batteries that go into electric vehicles (EVs).
In the case of Tesla, its Shanghai-based Gigajoule factory is expected to increase capacity 570% over the next decade to 248 gigawatt hours, according to data company, Benchmark Mineral Intelligence. One GWh of battery capacity is enough for 18,000 cars on average.