Vale and Tesla in talks to secure nickel supply for batteries

The nickel price ticked up modestly this morning as a reports that Brazilian miner Vale (NYSE:VALE) is in talks with Tesla (NASDAQ:TSLA) about a secure supply of nickel.

Nickel is one of the key components that Tesla uses in the manufacture of batteries for its electric vehicles, and in recent months there has been concern about possible bottlenecks in supply.

Tesla chief executive Elon Musk even tweeted that he hoped nickel companies would develop new ‘ethical' projects now, and not just after the price had risen.

Although that remark displayed a certain disconnect from the realities of mining economics, it did nevertheless put the nickel industry on notice.

And Vale, with its long-standing and well-known Canadian operations at Sudbury and Thompson and elsewhere, can at least tick a clear box as regards the ‘ethical' side of things.

As battery manufacturers move to reduce the amount of cobalt in their batteries it is likely nickel will be used to fil the gap. The proportion of nickel used in batteries has been rising for some time with the most recent iteration, the NCM 811 battery, containing 80% nickel.