Australian BHP miner shares jump on news of nickel supply business with Tesla electric vehicles

A Tesla car recharges in a Tesla Supercharger station on April 26, 2021 in Corte Madera, California.

Justin Sullivan | .

Actions of mining giant BHP Group rose 3% in Australia on Thursday morning, after the company announced will supply nickel to electric carmaker Tesla.

In a statement on Thursday, BHP said one of its based mines in Western Australia, Nickel West, will supply the world’s largest electric vehicle Creator with nickel, a key raw material Used in batteries for electric vehicles.

“Request for nickel in batteries are estimated to grow by over 500 percent over the next decade, in largely a support the world’S rising demand for electric vehicles, “said Vandita Pant, BHP’s Chief Commercial Officer in a declaration.

BHP currently drift more of his earnings from iron ore, mainly used to produce steel.

To read more on the electric vehicles by CNBC Pro

Even if there were no details on the deal amount, Tesla had said in June you expect spend more of $ 1 billion a year on raw materials for batteries from Australia, citing the country responsible manufacturing practices, according to Reuters.

BHP claims to be one of the most sustainable nickel producers with the lowest carbon emissions in the
world.

EV batteries will surely be critical is drive interest in copper and nickel in particular.

Vivek Dhar

goods analyst, Commonwealth Bank of Australia

The mining giant currently supplies 85% of it is nickel for global battery material suppliers, according to his website. It has also almost finished building a new plant that will produce nickel sulphate, a material Used in lithium-ion batteries that power electric vehicles, the website She said.

perspective for nickel

The main miners are set to get bigger in the mineral resources needed to decarbonise the global economy, Vivek Dhar, a commodity analyst by the Commonwealth Bank of Australia, he told CNBC via e-mail.

“Electric vehicle batteries will surely be critical is drive interest in copper and nickel in particular, “he said.

However, Peter O’Connor, metals and mines analyst at Shaw and Partners, he was less optimistic on the entire nickel sector, in terms of space for new players increase them market share.

He said the nickel market it’s still a lot small, with long-term sales turnover of about 40 billion dollars. Also, in addition to BHP, there are others key great players already crowding market, like Brazil’s Vale and Russia’s Norilsk Nickel, he told CNBC on Thursday.

BHP is listed in Australia, New York and London.

Resource senior analyst MineLife’s Gavin Wendt told CNBC earlier this week that he is 12 months old price target of 60 Australian dollars ($ 44) on BHP, that is currently at AU $ 51.40. His comments came before the nickel supply agreement with Tesla was announced.

“BHP’s share price performance it has been extremely strong and is outpacing its flagship resource mate Rio Tinto, ”he said, referring to another major Australian miner.

“In fact, BHP has over the past 12 months surpassed the S & P / ASX 200 index by about 14% – and it is trading not far off it’s all the time record tall of $ 51.82 achieved in May, with his price up about 36%, “he told CNBC on e-mail.

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