Tesla Needs More Nickel

by Gill D on September 14, 2020

A new Giga noun has surfaced. It wasn’t made up to attract Tesla and it is in no way related to the EV manufacturer. Giga Metals is in fact a Canadian mining company and its core asset is the Turnagain Project, located in northern British Columbia.

The site contains one of the largest undeveloped sulfide nickel and cobalt resources in the world and Giga Metals has the vision to be a premier supplier of nickel and cobalt, which are the metals used in the production of batteries for electric vehicles and storage of renewable power generation.

Giga Metals is actively advancing its flagship Turnagain nickel sulfide deposit with the aim of sustainably producing 40,000 tonnes of nickel per year. The Company has been supporting work with the University of British Columbia on CO2 sequestration in the pursuit of producing environmentally-friendly nickel with the objective of building one of the world’s first carbon-neutral mines.

Sulfide nickel ore is the most suitable to be refined into the Class I nickel required by battery manufacturers. Cobalt from stable supply countries such as Canada will be preferred over that from the Democratic Republic of Congo, which currently provides 65%-70% of the world’s supply. Africa's second-largest country, the Congo, is rich in raw materials and minerals. However, because it is ramp with deadly violence, insurgencies, corruption, and poverty. And because of this, EV makers are reducing their exposure to cobalt from the Congo because of human-rights concerns.

Now, it's been reported that Tesla is talking to Giga Metals to secure a nickel supply for its battery production. Last July, in Tesla’s last earnings call, Tesla boss, Elon Musk made a plea to mining companies to increase their nickel production:

"Well, I’d just like to re-emphasize, any mining companies out there, please mine more nickel. Okay. Wherever you are in the world, please mine more nickel and don’t wait for nickel to go back to some long — some high point that you experienced some five years ago, whatever. Go for efficiency, obviously environmentally-friendly nickel mining at high volume. Tesla will give you a giant contract for a long period of time if you mine nickel efficiently and in an environmentally sensitive way. So hopefully this message goes out to all mining companies. Please get nickel."

Reuters reports that Tesla is currently discussing a nickel supply deal with Giga Metals in Canada:

"Tesla Inc. is in discussions with Canadian miner Giga Metals about helping to develop a large mine that would give the electric vehicle maker access to low-carbon nickel for its batteries."

Neither Tesla nor Giga Metals confirmed the talks, but Giga Metals President Martin Vydra commented:

“Giga is actively engaged, and has been for some time, with automakers regarding our ability to produce carbon-neutral nickel.”

After the report came out, Giga Metals’ stock price almost doubled, and the company issued a statement with Martin Vydra adding:

“Giga Metals has been mentioned in recent media articles as they pertain to ongoing efforts to advance the Turnagain deposit to commercialization. What I can say is that there is no material announcement forthcoming and we will keep regulators and investors informed of any material changes that require disclosure in accordance with securities regulations.”

The growth in electric vehicles and energy storage is accelerating and so too will the feedstock of high-quality nickel and cobalt as well as other battery metals needed by manufacturers to keep up the pace as the clean energy revolution takes place.

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