BHP will supply Tesla with nickel from its Nickel West operations in Western Australia as part of a collaboration that will aim to make the battery supply chain more sustainable.
The two companies will partner to establish a supply chain that features end-to-end raw material traceability using blockchain.
They will develop a technical exchange for battery raw materials production and promote the importance of sustainability in the resources sector, including identifying partners which are most aligned with their principles and battery value chains.
The companies will also collaborate on energy storage solutions to identify opportunities to lower carbon emissions in their respective operations through increased use of renewable energy paired with battery storage.
BHP chief commercial officer Vandita Pant said demand for nickel in batteries is estimated to grow by more than 500 per cent over the next decade, in large part to support the world’s rising demand for electric vehicles.
“We are delighted to sign this agreement with Tesla, and to collaborate with them on ways to make the battery supply chain more sustainable through our shared focus on technology and innovation,” Pant said.
Tesla is the world’s largest manufacturer of electric vehicles and battery storage systems with a mission to accelerate the transition to sustainable energy, and nickel is a key metal used to manufacture Tesla’s battery technology.
Last month, Tesla chair Robyn Denholm declared that the company planned to spend more than $1 billion on Australia’s minerals supply to cater for growing electric vehicle (EV) demand.
BHP Minerals Australia president Edgar Basto said the miner produces some of the lowest carbon intensity nickel in the world and is on the pathway to net zero at its operations.
“Sustainable, reliable production of quality nickel will be essential to meeting demand from sustainable energy producers like Tesla,” Basto said.
“The investments we have made in our assets and our pursuit of commodities like nickel will help support global decarbonisation and position us to generate long-term value for our business.”
Western Australia Mines and Petroleum Minister Bill Johnston said the announcement reinforced the level of comfort global brands have in investing in the state knowing that raw materials would be responsibly sourced.
“As investors and the community are increasingly holding mining companies to the highest ESG standards and practices, the supply agreement between BHP and Tesla reflects the regulatory framework in place in Western Australia that ensures the sustainable production of battery materials,” Johnston said.