Tesla seeks to reduce dependence on China to source materials outside the country – 01/16/2022

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Tesla has turned to Mozambique to produce an important component of electric car batteries. Analysts believe it is a first-of-its-kind deal designed to reduce its dependence on China for graphite.

Elon Musk signed a deal last month with Australia’s Syrah Resources, which operates one of the world’s largest graphite mines in the South African country. It’s a unique partnership between an electric car manufacturer and a base metal producer for lithium-ion batteries. The value of the business was not disclosed.

Tesla will purchase the material from the company’s processing plant in Vidalia, Louisiana, which makes graphite from its mine in Balama, Mozambique. The Austin, Texas-based electric car maker plans to buy 80% of the plant’s output — 8,000 tons of graphite annually — by 2025, according to the understanding. Syrah must demonstrate that the materials meet Tesla standards.

Simon Morris, of Benchmark Mineral Intelligence, said the deal is part of Tesla’s plan to increase its ability to make its own batteries to reduce its dependence on China, which dominates global graphite markets. .

“It starts at the top with geopolitics,” Morris said. “The US wants to build enough domestic capacity to be able to build (lithium-ion batteries) inside the US. This deal will allow Tesla to supply graphite independently from China,” he explained.

Morse added that battery production in the United States will reduce some of the questions Tesla faces about its ties to China, where there are environmental concerns at some mines. The automaker has also set up a showroom in the Xinjiang region, where Chinese officials are accused of forced labor and other human rights abuses against mostly Muslim ethnic minorities. ]

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(Associated Press.com)

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