Tesla CEO Elon Musk calls for increase in nickel production
This call came with a warning that the current high cost of nickel, which is a key component of the batteries that Tesla cars run on, is an obstacle to the company’s further growth. Nickel is also important for the production of solar panels, which is another priority for Tesla.
Earlier this week Mr Musk announced: “Tesla will give you a giant contract for a long period of time if you mine nickel efficiently and in an environmentally sensitive way”.
While Mr Musk’s comments made headlines, analysts and mining industry traders are sceptical that they would bring about an actual increase in nickel production - or that such a move would have any impact on the price of nickel.
One nickel trader in China was reported as saying: “He needs nickel, so he hopes nickel prices will go lower and lower. [But] prices will not be impacted in the short-term because the market is in surplus.”
The price of nickel is currently $13,180 - higher than the 14-month low that it reached in March this year, but still 30% down on the five-year peak that was seen in September 2019.
In the event that Tesla moves to acquire higher volumes of nickel, given the company’s dedication to sustainability, it would probably buy from suppliers of nickel sulphide, which is more economical to process than laterite ore. This makes it likely that Tesla would approach one of Vale, a Brazilian company operating in Canada, the Russian concern Norilsk Nickel, or the Australian BHP Group.
Elon Musk also commented: “The real limitation on Tesla growth is cell production at affordable price. That’s the real limit”.
Copper production from top ten companies to increase by 3.8%
Copper production from the world’s top companies is set to increase by up to 3.8% this year, following a fall of 0.2% in 2020, GlobalData analysis reveals. Last year’s marginal slump saw production drop to 11.76 million tonnes (Mt).
The initial impact of the COVID-19 pandemic on mining operations was immense, however, six of the ten largest copper producers succeeded in increasing output last year. In 2021, copper production from the top ten copper companies is expected to bounce back, rising by up to 3.8%, to reach 12.2Mt, according to GlobalData, a leading data and analytics company.
The highest increase in copper production was by Canada’s First Quantum, which, despite all the challenges, reported 10.4% growth in 2020. The company’s Sentinel mine in Zambia and Cobre Panama were key contributors to this growth. While the latter remained under care and maintenance between April and August 2020, it delivered record production levels during the subsequent months.
Codelco, the world’s largest producer of the red metal used in electric vehicles, also bucked the trend.
Vinneth Bajaj, Associate Project Manager at GlobalData, commented: “Despite Codelco reporting over 3,400 active cases during July 2020, the company achieved 1.2% growth in its production in 2020. The company implemented a four-phase plan, as part of the COVID-19 measures, to ensure the health and safety of its employees, while also avoiding any significant impact to its copper output.”
Although the overall impact was minimal, declines in production were observed from Glencore (8.2%), Antofagasta (4.7%), BHP (3.9%) and Freeport McMoRan (1.3%). Reduced operational workforces due to COVID-19 measures, lower ore grades and production halts due to maintenance were the key disruptors to output during 2020.
The move towards electric vehicles and clean energy from renewables sources such as solar panels and wind turbines has driven the copper price to all-time highs. Copper has been among the best performers over the last month where metals ranging from aluminum to iron ore have surged to their highest prices in years. The rally is being fueled by stimulus measures, near-zero interest rates and signs that economies are recovering from the global pandemic.