UPDATE 3-BHP to supply Australian nickel to carmaker Tesla

(Adds details and writes through)

MELBOURNE July 22 (Reuters) – Global miner BHP Group said on Thursday it signed a nickel supply agreement with Tesla Inc and will work with the electric carmaker on lowering carbon emissions in the battery supply chain.

Tesla said in June it expects to spend more than $1 billion a year on battery raw materials from Australia given the country's reliable mining industry and responsible production practices.

Western automaker are also seeking to diversify supply chains to lessen their dependence on China, in line with a policy by U.S. President Joe Biden's administration to rely on allies to supply of the bulk of metals for electric vehicles.

BHP said the metal will be supplied from its Nickel West project in Western Australia which is set to start producing nickel sulphate, a key battery chemical, and one that has much higher margins than nickel metal, in the September quarter.

Nickel makes batteries energy-dense, allowing cars to run further on a single charge.

BHP's nickel division accounts for less than 1 percent its earnings, which are dominated by iron ore.

BHP and Tesla will also look at end-to-end raw material tracing using blockchain, and work on energy storage solutions, the miner said in the statement. (Reporting by Melanie Burton and Nikhil Kurian Nainan in Bengaluru; Editing by Subhranshu Sahu and Richard Pullin)

By Matt Earle

Matthew Earle is the Founder of MiningFeeds. In 2005, Matt founded MiningNerds.com to provide data and information to the mining investment community. This site was merged with Highgrade Review to form MiningFeeds. Matt has a B.Sc. degree with a minor in geology from the University of Toronto.

If you would like to receive our free newsletter via email, simply enter your email address below & click subscribe.

MOST ACTIVE MINING STOCKS

 Daily Gainers

 AsiaBaseMetals Inc. ABZ.V +29.03%
 Reedy Lagoon Corp. Limited RLC.AX +28.00%
 Golden Queen Mining Co. Ltd. GQM.TO +20.00%
 Chesser Resources Limited CHZ.AX +17.39%
 Standard Lithium SLL.V +16.42%
 Abcourt Mines Inc. ABI.V +15.79%
 Impact Minerals Limited IPT.AX +15.38%
 Alligator Energy Limited AGE.AX +15.29%
 Patagonia Gold plc PGD.L +14.29%
 Finlay Minerals Ltd. FYL.V +14.29%