Yahoo Finance Elon Musk to buy nickel for Tesla batteries from BHP
Tesla has struck a deal to buy nickel from mining giant BHP as electric carmakers race to shore up battery materials.
Elon Musk’s $630bn (£460bn) company has signed a supply deal with BHP’s Nickel West mine and refinery in Western Australia.
Mr Musk is keen to source battery ingredients that have been sustainably produced. BHP says Nickel West is one of the lowest carbon emission nickel producers in the world.
Terms of the deal have not been released. Nickel West produces around 80,000 tons of nickel per year, enough for about 2m electric car batteries.
The companies said they would also work together on improving the battery supply chains so products are mined, produced and recycled cleanly, ethically and efficiently.
Separately, Australia’s top independent gas producer is said to be eyeing BHP’s portfolio as the global mining giant tries to move away from fossil fuels.
Woodside Petroleum is in talks to buy some or all of BHP’s oil and gas assets, according to reports in Australia hours after Bloomberg revealed BHP was considering selling off the $10bn-$15bn (£7bn-£11bn) package.
Shares in Woodside fell on Wednesday following reports of its interest in The Australian newspaper, amid concern it may have to issue new shares to fund any deal or be lumbered with decommissioning costs. BHP and Woodside declined to comment on the reports.
A Woodside spokesman told Reuters it was focused on running a project in Senegal and reaching investment decisions on projects in Western Australia. It already has stakes in two of BHP’s Australian projects – the North West Shelf liquefied natural gas project and the Scarborough gas field.
BHP’s oil and gas portfolio includes assets off Australia, Trinidad and Tobago and in the Gulf of Mexico. They are forecast to earn more than $2bn this year, and produce more than 102.8 million barrels of oil equivalent.
Like other miners, BHP needs to cut down on carbon-intensive parts of its portfolio and wants to boost its presence in metals set to be in demand in the shift to electric cars and electric heating, such as copper and nickel.
BHP’s chief executive, Mike Henry, said in March that BHP sees “attractive value and returns to be generated for shareholders for the next decade” from oil and gas, but would sell off more mature assets.
It already sold a $10.5bn package of US shale oil and gas assets to BP in 2018. According to Bloomberg, BHP insiders are keen to get a similarly good price for the rest of the assets while they can, with oil prices surging as economies recover.
BHP’s London-listed shares rose 2.7pc, or 59.5p, to £22.48.
