Tesla signs contract with Glencore for annual supply of up to 6,000 tons of cobalt
According to sources from Bloomberg, among others, Tesla has signed an agreement with the Swiss Glencore for the supply of possibly 6,000 tons of cobalt per year. The mineral is extracted in mines in Congo-Kinshasa and is an important battery component.
Bloomberg, among others, writes that a source who would be familiar with the subject indicates that the supply from Glencore is intended for the new Tesla factory in Shanghai and the planned factory near Berlin. The deal could be for up to 6000 tons per year, although it is not clear when deliveries will start. Tesla and Glencore declined to comment.
The agreement means that Tesla will continue to be assured of cobalt for years to come, which is still an important component of lithium-ion batteries. According to the Bloomberg source, the agreement with Switzerland’s Glencore, the world’s largest industrial cobalt supplier, is intended to avoid potential increasing demand and potential shortages in the future.
The price of the mineral skyrocketed in 2017 and the first months of 2018. Since then, the price has fallen sharply again, but with the rise of the electric car and the many new models from all kinds of manufacturers on the way, it is expected that the demand for and with it the price of cobalt will increase considerably.
Eliminating cobalt entirely from lithium-ion batteries is still quite difficult, because the mineral is important for the stability of the batteries. Tesla is working to further reduce the amount of cobalt required in the cathodes. A Volkswagen battery researcher said a year ago that batteries from the Tesla Model 3 contain four times less cobalt than the batteries that Volkswagen will use in its upcoming ID.3 car. It would be less than three percent cobalt in the batteries of the Model 3.
Cobalt comes mainly from the African country of Congo-Kinshasa. The country is responsible for about 60 percent of the total world production of the metal, which is mainly extracted as a by-product of copper smelting. Certainly in the case of non-industrial mines, this is often accompanied by appalling conditions, child labor and the necessary environmental pollution. Glencore has two industrial mines in the country.
At the end of last year, Congolese parents and children sued Apple, Google, Microsoft, Dell and Tesla for accidents in cobalt mines. In the indictment, Glencore is named as the operator of several industrial mines. The company defended itself by stating that it does not buy or process artisanal ore and that it does not tolerate child or forced labour.