Tesla would like to acquire one Participation of the Swiss commodity group, Glencore. Preliminary discussions of Elon Musk's electric car and battery maker's purchase of 10-20% of Glencore began last year, the report reported. Financial Times, and continued until last March, when the CEO of Glencore, Gary Nagle, visited Tesla's factory in Fremont, California as part of a roadshow for the mining company's annual results.
Elon Musk in the face of this period of great instability – between theharried buying of Twitter and numerous delusional tweets – he wants to secure supplies for the future. Currently there is sufficient supply of these raw materials – such as cobalt, lithium and nickel – necessary for the production of batteries, but demand should increase in the coming years also in view of theEU agreement for the 100% reduction by 2035 with the transition to the electric motor.
Tesla evaluates the purchase of Glencore, but there are obstacles
However, according to the newspaper, the discussions for the purchase of a stake would have stalled in March 2022, when Tesla expressed concerns about environmental impact of Glencore's coal mining operations, in stark conflict with Musk's environmental sustainability message. In particular, after becoming the sole owner of the coal mine Cerrejón, in Colombia, the largest in Latin America.
Glencore has affirmed its commitment to reduce total emissions by 15% by 2026 and 50% by 2035, with a goal of reaching zero emissions in 2050. However, it is difficult to understand how it will do after ramping up its extraction in Colombian coal.
Does Musk want a stake in Glencore or is it just a market move?
Glencore is the largest publicly traded trading company in the world and the largest producer of cobalt through its mines in the Democratic Republic of the Congo, Australia and Canada. Two years ago Tesla secured a offtake agreement (multi-year agreements for the supply of raw materials) of cobalt with the Swiss group to supply its factories in Shanghai and Berlin.
Musk has previously explained Tesla's intention to take greater control over all production phases of its batteries, including processing raw materials and even purchasing lithium deposits still in the ground, should the supply chain fail. So much so that Musk's automaker is pursuing plans to build its own lithium hydroxide refinery on the Gulf Coast of Texas.
In April, the billionaire took to Twitter, the social media site he bought this week, to voice his concerns about lithium costs: "Tesla may be forced to go straight into mining and refining at scale unless costs improve." The price of lithium has increased eight-fold since the start of 2021.
Analysts have been widely skeptical that Musk is keen to invest in mining groups or trading firms, suggesting his comments were largely intended to "shake up" raw material suppliers to ramp up production.
Not only Tesla, car manufacturers are running for cover
As EV production ramps up, automakers are scouring the world to secure the raw materials they need, sparking a flurry of offtake deals. For example, the Swiss giant has already entered into cobalt offtake agreements with battery manufacturers SK Innovation e Samsung SDI and with car manufacturers BMW e GM.
In addition to the cobalt offtake agreement with Glencore, Tesla has concluded a long-term agreement to supply nickel from the Brazilian mining group OK.
Ford has entered into a lithium offtake agreement with the Australian Liontown Resources, which provides upfront financing of the project, and acquired a minority stake in a nickel ore processing plant in Indonesia.
Also stellantis, born from the merger of Fiat Chrysler (owner of Jeep) and PSA (owner of Peugeot), e General Motors they started investing in mining groups.
