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Tesla seeks for a technical and industrial partnership in the Goro mine

Several media including BBC reported that Tesla has decided to become a technical partner in a nickel mine called “Goro mine” in New Caledonia. Nickel is needed for lithium-ion batteries that power electric vehicles. In December 2021, Goro’s owners Brazilian mining giant Vale and the French state tried to sell it to Trafigura.

According to the agreement, Tesla will help Vale and others produce nickel and keep sustainability standards. Vale said the deal would “enable the operations to continue with a sustainable path for the future. In addition, it would preserve jobs and deliver economic value to the country”.

Who is New Caledonia?

New Caledonia is a French overseas territory in the Pacific. There two main populations. One is its indigenous Kanak population, which represents around 39% of the population. The other are Europeans, most of whom were born in the territory, make up about 27% of the population. Most of the remainder come from other Pacific islands, and they are mixed heritage, or prefer to identify as “Caledonian”.

New Caledonia is rich in resources and accounts for around 10% of the world’s nickel reserve. New Caledonia enjoys a large degree of autonomy but depends heavily on France for matters like defense and education.

What is Nickel?

According to Royal Society of Chemistry, the name of Nickel is the shortened for of the German “’kupfernickel”. It means that either devil’s copper or St. Nicholas’s copper. We use Nickel for batteries, including rechargeable nickel-cadmium batteries, and nickel-metal hydride batteries used in hybrid vehicles.

Who is Vale S.A.?

Vale, which was originally Companhia Vale do Rio Doce, is the largest producer of iron ore, pellets and nickel. The company was founded in 1942 and its head office is in Rio de Janeiro, Brazil. Vale also produces manganese, ferroalloys, copper, bauxite, potash, kaolin, and cobalt, and currently operates nine hydroelectricity plants.

Vale’s mission is to transform natural resources into prosperity and sustainable development. For example, 54% of the energy consumed at Vale is self-generated. In addition to mining, it works with logistics including railways, ports, terminals and state-of-the-art infrastructure, and energy.

Elon Musk’s insights and decision

As we see the other article about the agreement between BASF and Eramet, production of raw material is crucial. Why is it crucial? This is because we cannot manufacture anything without raw materials. In other words, raw material is a starting point to produce something.

However, the problem is that some precious materials exist unevenly across the globe. When it comes to Nickel, it exists mostly in Russia, Canada, New Caledonia and Indonesia. We primarily use Nickel to make stainless steel, but the demand of electric vehicles is skyrocketing. Therefore, the production of Nickel can be risk to manufacture electric vehicles so that Tesla took actions proactively. In fact, Tesla’s CEO, Elon Musk, tweeted “Nickel is our biggest concern for scaling lithium-ion cell production.”

What can we learn from this initiative? The take away is that the management of manufacturing companies have to gather information in the world. They should have insights to forecast the future and make bold decisions to keep their business successful. It is really tough, but they should. Thus, research institutions and business intelligence become more essential.