Tesla is now turning to Mozambique to get key components for its batteries. Analysts believe this to be the first-of-its kind deal that is designed to reduce total dependence on China for graphite.
Tesla Plans to Buy 80% of What the Plant Produces
According to the story by CNBC, Elon Musk's company has just recently signed an agreement with the Syrah Resources company from Australia. Syrah Resources currently operates one of the world's largest graphite mines located in the Mozambique.
The popular Austin, Texas-based EV automaker plans to buy up a whopping 80% of what the plant produces, which is 8,000 tons of graphite a year. Per the agreement, the deal is expected to take place starting 2025.
Deal is a Unique Partner Between EV Manufacturers and Producers
The deal is a unique partnership between the EV manufacturer as well as a producer of the mineral critical for the production of lithium-ion batteries. To add, the value of the deal has not yet been disclosed, as also reported by Electrek.
Tesla is buying up the material from the company's processing plant located in Vidalia, Louisiana, which is sourcing graphite from its mine located in Balama, Mozambique. However, Syrah has to prove the material meets the standards of Tesla.
Company Plans to Ramp Up Battery Capabilities
The deal is reportedly part of Tesla's plan to ramp up its own capability to make its very own batteries in order to reduce its total dependence on China. This is according to Simon Moores of the United Kingdom-based battery materials data and intelligence provider, Benchmark Mineral Intelligence.
As of press time, China dominates the global graphite markets.
US Wants to Build Enough Capacity to Domestically Build Lithium-Ion Batteries
Moores stated that the United States wants to build enough capacity to be able to domestically build lithium-ion batteries within the country. In connection, Tesla's deal will allow the company to source out graphite independent of China.
Moores noted that the batteries produced within the US will reduce a number of the questions that the company is facing regarding its ties to China. As of press time, mines in China have a couple of environmental concerns.
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Short Supply of Graphite Impacts the Whole Battery Industry
Tesla has also set up its showroom in the region of Xinjiang. This is where Chinese officials are accused of forced labor as well as other human rights abuses, according to reports.
The whole battery industry has actually been confronted with a short supply of graphite in the course of the recent months, according to Moores. Graphite currently stores lithium inside a battery until it is needed to be able to generate electricity through splitting into charged electrons and ions.
The news comes at a time where every major automaker is now racing to get into EVs amidst concerns regarding climate change.
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This article is owned by Tech Times
Written by Urian B.
