Tesla CEO Elon Musk appealed to mining companies in July, to produce more nickel, which is the most important metal in electric vehicle (EV) batteries.
While these are popularly called as lithium-ion batteries, Musk noted during the Tesla's 2016 shareholder meeting that it is a misnomer since they only contain 2% much lithium. "Technically, our cells should be called nickel-graphite, because the primary constituent in the cell as a whole is nickel," Musk clarified.
Musk's recent plea highlighted the importance of nickel, particularly for his electric vehicle company. "Please mine more nickel," he said adding that Tesla would award companies with a huge, long-time contract that can assure volume of nickel using environmentally-friendly mining processes.
Regent Advisors Managing Director Michael Beck told Kitco News that nickel trade may experience a perfect storm with the surge in demand, which is not easy to meet. For Tesla, a Model 3 vehicle carries about 30 kilograms of nickel, which he noted as "the single most important metal component" in making a battery. "It's where all of the energy is stored," said Beck. Also, battery manufacturers are refining their technologies to include as much nickel as possible, which means higher energy density of the battery.
Canada has environmentally-responsible nickel mining
Responding to Musk's appeal, Vancouver-based Giga Metals said that it is developing an environmentally-friendly nickel resource. Giga Metals CEO Mark Jarvis advised Musk to look at sulfide deposits in Canada and Australia if he wants "environmentally-responsible nickel."
While Canada has numerous nickel mines, Giga Metals' property in north-central British Columbia called Turnagain is said to be one of the world's largest undeveloped sulfide nickel and cobalt projects.
"Our goal is to be the world's first carbon-neutral mine," said Giga Metals President Martin Vydra adding that the company would use BC Hydro's clean energy grid to power the mining company. While it will cost more capital, Vydra stated that it "is the right thing to do."
Meanwhile, Vydra noted that since Canada has some of the toughest environmental laws, which would ensure that companies buying nickel from Canada are assured the metals are ethically sourced.
Nickel: Why is it so in-demand?
Nickel is a really expensive metal and is currently at a bargain at around $13,000 per ton, according to research firm Wood Mackenzie. With the recent development, the firm estimates that the demand will surge by 64% between 2019 and 2025, which is a huge leap after its price dropped in 2007.
Nickel is a natural mineral that humans have been consuming for ages. It was believed that over 2,000 years ago, artisans in Syria used the mineral to strengthen their pieces. It was first highlighted in 1751 by Swedish chemist Axel Fredrik Cronstedt who named the new mineral "Kupfernickel" or Devil's Copper. At the time when copper was among the most valuable minerals, the new metal was like a Fool's Gold.
The Nickel Institute estimated that around 300 million tons of nickel is being mined worldwide, making it the fifth-most common mineral, based on a nickel mining trade organization.
Nickel can easily strengthen materials considering its high melting point at over 1,400 degrees Fahrenheit, resistance to corrosion, and magnetic properties at room temperature, which makes it great for battery use. Cecilia Jamasmie Mining noted that using nickel in batteries makes them energy-dense, so they can be smaller and lighter while allowing cars to travel further on just a single charge.
Musk's recent appeal highlighted the urgency of the need as Tesla has been competing with other EV car manufacturers for the limited supply amid the surging demand. Those who will respond to the call will surely be greatly compensated.