Musk Promises ‘Giant Contract’ for Efficiently Mined Nickel

(Bloomberg) -- Elon Musk has a plea for mining companies: “Please mine more nickel.”“Tesla will give you a giant contract for a long period of time if you mine nickel efficiently and in an environmentally sensitive way,” said Musk, chief executive officer of the electric-carmaker, during a second-quarter earnings call.Musk’s plea comes as one of Japan’s general trading giants is about to take a roughly $500 million writedown on a nickel project in Madagascar because of low prices and the coronavirus pandemic.Supplies of battery-grade nickel -- a key component in the cathode of an electric vehicle’s battery -- could run short as early as 2023. BloombergNEF expects a tight balance in the next two to three years as lithium-ion battery demand picks up.Already, Ambatovy -- one of the world’s largest nickel projects, with full operational capacity representing 5% of class 1 nickel global production capacity -- hasn’t resumed operations after being suspended in March 2020. An extended suspension will exacerbate the potential tightness in the nickel market.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.