New Caledonia agrees to nickel mine sale, with Tesla as partner

It is difficult to imagine a worse fit for a business interest in the Goro mine.

Tesla partners with nickel mine amid shortage fears

https://www.bbc.co.uk/news/business-56288781

5 March 2020

Tesla has decided to become a technical partner in a nickel mine - which is needed for lithium-ion batteries that power electric cars.

Elon Musk's car firm will also buy nickel from the Goro mine on the small Pacific island of New Caledonia to secure its long-term supply.

The move comes amid growing concerns about future supplies of nickel.

New Caledonia is the world's fourth largest nickel producer, which has seen a 26% rally in prices in the past year.

"Nickel is our biggest concern for scaling lithium-ion cell production," Musk said on Twitter last month.

New Caledonia is a French overseas territory although it has seen growing calls for its independence.

What is the Goro mine?

New Caledonia's huge nickel reserves are crucial for the local economy, and the Goro mine, in the south of the island, has the potential to be one of the world's biggest nickel producers.

In December, its owners Brazilian mining giant Vale and the French state, tried to sell it to Swiss commodities trader Trafigura.

Residents were so angry about the loss of local ownership and control that it sparked the collapse of New Caledonia's government and led to workers going on strike.

A new agreement hammered out on Thursday by pro-independence groups, loyalist parties and indigenous Kanaks will see the mine sold to a consortium that now includes employees as well as three regional provinces. Trafigura will hold just 19%.

Tesla will be involved in a "technical and industrial partnership" to help with product and sustainability standards along with taking nickel for its battery production, according to the agreement.

It will play the role of technical consultant in the design and improvement of the manufacturing process.

Vale said the deal would "enable the operations to continue with a sustainable path for the future, preserving jobs and delivering economic value to the country".

Greater control

While Tesla will not have an equity stake, its partnership in the mine gives it greater control over its electric battery supply chain as it ramps up production.

Nickel is mined mostly in Russia, Canada, New Caledonia and Indonesia and primarily used to make stainless steel. But the growth in electric vehicles has added a new source of demand for the metal.

The extraction of nickel, particularly the use of coal-fired power, comes at an environmental and health cost and mines have been criticised repeatedly by campaigners

Thursday's agreement called for reinforced environmental standards and set a target for the mining complex to be carbon neutral by 2040.

New Caledonia agrees to Vale nickel mine sale, Tesla to be partner

https://finance.yahoo.com/news/caledonia-agrees-vale-nickel-mine-160656092.html

March 4, 2021

Political leaders in New Caledonia on Thursday agreed new terms for the sale of Vale's nickel business, including a majority stakeholding for local interests, seeking to resolve unrest over the planned sale.

The deal signed by pro-independence and loyalist leaders in the French Pacific territory also cited a "technical and industrial partnership" with Tesla, under which the electric car company would source raw materials for batteries.

Brazilian miner Vale's decision last year to sell its nickel mine and processing plant to a consortium including Swiss commodity trader Trafigura sparked fierce opposition from pro-independence groups.

Violent protests led Vale to shut down the site in December.

Under Thursday's agreement, political groups proposed that a 51% stake in the Vale operations be held by New Caledonia's provincial authorities and other local interests. Trafigura would have a 19% stake, less than the 25% planned in the initial sale deal with Vale.

The parties also called for reinforced environmental standards and set a target for the mining complex to be carbon neutral by 2040.

Vale and Trafigura welcomed the political agreement.

"Our task now is to complete any and all outstanding items to allow the transaction to formally conclude," Vale said in an emailed statement.

The company, which has tried to sell the New Caledonian assets for years, has said around 3,000 direct and indirect jobs depend on the restart of its mining complex.

"We're looking forward to operations resuming and for final completion of the transaction as soon as possible," a Trafigura spokesperson said.

Tesla did not immediately respond to a request for comment.

The electric vehicle maker would act as an industrial partner to help with product and sustainability standards as well as taking some supply for its battery production, according to the political agreement.

Demand for nickel, mainly used in making stainless steel, is expected to be boosted by demand for electric vehicle batteries.

New Caledonia is the world's fourth-largest nickel producer. Its nickel industry also includes the SLN subsidiary of French mining group Eramet and a joint venture between commodity group Glencore and New Caledonia's northern province.

(Reporting by Gus Trompiz and Eric Onstad; Editing by David Goodman and Emelia Sithole-Matarise)