Tesla has reportedly signed an undisclosed deal with Brazilian mining company Vale for an additional supply of nickel.
Citing unnamed sources, Bloomberg says the agreement is for multiple years and covers nickel from Canada.
Vale is a multinational corporation and the largest producer of iron ore and nickel in the world, with facilities in Ontario, Manitoba, and Newfoundland and Labrador.
Nickel is one of the key ingredients used in making electric vehicle (EV) batteries, and with demand for EVs increasing, so is the demand for the material.
Combining that demand with the Russian-Ukraine war has seen the price of the nickel rise to more than $40,000 per ton. Currently the price is just over $32,000 per ton.
Tesla has been on the hunt to secure additional supply ever since CEO Elon Musk said he would offer a “giant contract for a long period of time” for companies that could mine nickel “efficiently and in an environmentally sensitive way.”
Vale is one of those companies, committing to spending about $2 billion on low-carbon projects including electric work vehicles for underground operations, fuel switching, and heat recovery.
The automaker also became a technical partner on a nickel mine on the Pacific island of New Caledonia last year.