Tesla Resorts to Mozambique for Key Battery Component

JAKARTADAILY.ID - Tesla is resorting to Mozambique for a critical component in its electric car batteries, in what experts believe is a first-of-its-type transaction aimed to lessen the company's reliance on China for graphite, The Associated Press reported Sunday (January 16, 2022).

Last month, Elon Musk's firm reached an arrangement with Australia's Syrah Resources, which manages one of the world's largest graphite mines in the country of South Africa.

It's a one-of-a-kind collaboration between an electric vehicle maker and a producer of the mineral required for lithium-ion batteries.

Tesla will obtain the material from the company's processing plant in Vidalia, Louisiana, which derives graphite from its mine in Balama, Mozambique. According to the agreement, the Austin, Texas-based electric vehicle manufacturer expects to purchase 80 percent of the plant's output — 8,000 tons of graphite per year — beginning in 2025.

According to Simon Moores of Benchmark Mineral Intelligence, a battery components data and intelligence provider based in the United Kingdom, the agreement is part of Tesla's plan to increase its capacity to manufacture its own batteries in order to reduce its reliance on China, which controls global graphite markets.

“The U.S. wants to build enough capacity domestically to be able to build (lithium-ion batteries) within the USA. And this deal will permit Tesla to source graphite independent from China,” he explained.

The arrangement with Syrah is part of a larger push by automakers to source relatively limited raw resources for batteries as demand for electric vehicles soars, according to Sam Abuelsamid, chief e-mobility analyst for Guidehouse Insights.

However, he added that the Tesla contract with Syrah is unlikely to bother the Chinese government as China has plenty of outlets for its graphite, including expanded local electric vehicle production.

The deal's value has not been disclosed.