Tesla (TSLA) is in talks with Canadian miner Giga Metals about helping to develop a large mine that would provide it with low carbon nickel access for its batteries, Reuters reports, citing three sources familiar with the matter.
Giga Metals’ President Martin Vydra told Reuters: “Giga is actively engaged, and has been for some time, with automakers regarding our ability to produce carbon neutral nickel.”
“The cost of developing our project, excluding bringing hydroelectric power to the site, will be less than $1 billion” Vydra added, but did not give any further details.
The company’s Turnagain mine in British Columbia has measured and indicated resources of 2.36 million tonnes of nickel and 141,000 tonnes of cobalt. In comparison, the whole of Canada produced 180,000 tonnes of nickel last year.
According to one source: “The mine is in North America, so could secure supplies for Tesla’s Nevada Gigafactory.” The source added that Tesla could provide financing, in return for equity, and nickel and cobalt- and that the deal would last for the life of the mine (up to 40 years).
“Mining and processing the ore at Turnagain is likely to generate up to 28,000 tonnes of carbon dioxide a year,” Reuters quoted another source as saying. “The tailings could absorb up to a similar tonnage of carbon, neutralizing emissions from the mine.”
Tesla stock has taken investors on quite the roller-coaster ride. It is now trading at $372.72 per share, down 25% this month, which in turn reflects a 13% rise from $330 per share just a few days prior.
The tech rally’s poster boy was hit the hardest during the recent downturn, and its exclusion from the latest S&P 500 reshuffle soured sentiment.
However, Tesla has a big catalyst on the horizon, with its much-anticipated Battery Day taking place on September 22. Oppenheimer analyst Colin Rusch expects Musk and Co. to shine a light on how Tesla plans to make use of Maxwell Technologies, the ultra-capacitor manufacturer and battery technology company it acquired in 2019.
The analyst reiterated his TSLA buy rating and $451 price target, saying he expects “meaningful detail on how TSLA will deploy the technology.”
Rusch is currently among a minority on Wall Street. The majority take a more cautious approach with a Hold analyst consensus. Over the coming months, the Street expects shares to trend 22% lower, given the $293.67 average price target. (See TSLA stock analysis on TipRanks)