Carmakers switch to direct deals with miners to power electric vehicles

In the 1920s Henry Ford set up rubber plantations in the Amazon, a steel mill in Michigan and coal mines across the US to supply his growing automotive empire. A century later, car groups are again looking to take greater control of their raw material supply chains in the race to electrify the global car fleet.

Demand for electric cars is taking off but the bottleneck of raw materials for batteries such as lithium, nickel and cobalt is threatening to slam the brakes on their rollout — a problem that could lead to factory shutdowns and land carmakers with billion-dollar fines for missing emissions targets.

The International Energy Agency forecasts that soaring EV battery demand will require 50 new lithium projects, 60 nickel mines and 17 cobalt developments by 2030, a huge challenge for an industry that typically takes 15 years or more to develop a project.

“We’re absolutely convinced that this is a race, a zero-sum game and resources are a finite limit,” Tanya Skilton, director of purchasing for electric vehicle critical materials at General Motors, said last month.

Now carmakers are going right down the chain to the mines themselves, both to secure the supplies cheaply and to ensure ethical and emissions standards are met. Stellantis, owner of the Peugeot and Fiat brands, and GM are among those that have invested in early-stage mining companies in an attempt to secure resources. Tesla has been the most aggressive western carmaker in signalling it will become directly involved in the mining and processing of critical raw materials when the supply chain is unable to meet its needs.

“The carmakers have woken up to this,” said Doug Johnson-Poensgen, chief executive of Circulor, a technology group that uses a distributed database to track parts and material through the supply chain. “That’s why quite a number of the auto groups have direct supply deals.”

Ivanhoe Mines’ tier-one portfolio of mineral projects in Southern Africa is well-positioned to be a responsible, long-life supplier of critical metals for global electrification and decarbonisation, including copper, nickel, zinc, platinum-group metals and silver.

For more information please visit argentinalithium.com.

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