Prony Resources said that Tesla Inc had agreed to purchase more than 42,000 tonnes of nickel in a multi-year deal – a pact that is set to make it a key supplier of the metal to the U.S. electric car maker.
Prony added that it aims to produce 44,000 tonnes of nickel by 2024, double its expected 2021 output. It will also embark on cost cuts as well as efforts to clean up waste from the nickel plant.
Electric vehicle makers have made securing sufficient supplies of nickel – a key ingredient in automotive batteries – a top priority and are particularly keen to seek out sustainable and low-carbon nickel supplies.
The automaker is expected to deploy around 30,000 tonnes of nickel in batteries this year and is likely to rapidly ramp up its nickel consumption in the coming years.
Prony expects the nickel market to return to a surplus for four years from 2022 partly as top producer Indonesia will boost supply – albeit in a process that is emissions heavy. But by 2026 demand for nickel from the battery sector should be “exponential”.