Tesla (NASDAQ: TSLA) allegedly held talks with Glencore about a potential equity stake in the Swiss mining company in an effort to secure precious metals vital to its production of electric vehicles.
According to the Financial Times which cited individuals familiar with the matter, Tesla and Glencore talked about the EV maker potentially taking a 10-20% stake in the mining company. The dialogue began sometime in 2021 and continued up until March of this year, during when Glencore CEO Gary Nagle visiting Elon Musk’s Fremont manufacturing facility in California. However, the talks did not come to close, as Musk expressed concern over the commodity company’s coal mining business running counterproductive to Tesla’s strongly-held convictions on ESG goals.
Glencore is the biggest listed trading house and the largest cobalt producer in the world. The Swiss company has numerous mines in Canada, Australia, and the Democratic Republic of Congo. In addition to cobalt production, Glencore also produces nickel and copper, as well as recycles batteries. The mining giant does not extract lithium, but it did, however, recently start trading the metal.
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Shortly after Nagle’s visit to California, Musk hinted that his EV company might vertically integrate the lithium mining and refining component into its auto-manufacturing. Two years ago, Tesla entered into a cobalt deal with Glencore to provide thousands of tons of the metal to its Shanghai and Berlin factories each year.
Most EV companies have thus far refrained from taking on direct stakes in the mineral mining business, but as Western governments increasingly look to ban combustion engines, big carmakers will likely seek ties with the mining industry to secure supplies for their electric vehicles.
Information for this briefing was found via the Financial Times and the sources mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
