Sean Mitchell has published his thoughts on YouTube as to why Tesla getting into the mining business makes sense. When Elon Musk first talked about Tesla going into the mining business, I got really excited, but my mind went off in another direction. I immediately envisioned a Tesla booth at a gem show with minerals in every color shaped like little Teslas. I am sure that’s not what Elon had in mind.
For Tesla as a company to make money, it needs to make sure it’s not spending too much, and one way of doing this is scaling up battery production and managing parts of the supply chain that need its leadership.
How are batteries made? What minerals are needed to make Tesla batteries, and would taking some of the elements of the batteries’ creation into Tesla’s own hands be cost-effective? This could make a lot of sense. Sean explains what Tesla already has down in this regard.
Sean believes that Tesla acquired Maxwell and Hibar so that it could control two-thirds of the production process. The last part it doesn’t have control over is the sourcing of raw materials such as copper, lithium, etc. Sean tells us that in his opinion, this is fundamental to Tesla reducing its cost in creating the battery packs. I agree.
In 2017, Kurt Kelty, former Tesla Senior Director of Battery Tech, gave a presentation in which he talked about how important it was to reduce the cost of making the batteries. How far into the battery supplies Tesla goes to make that happen is the question. Another thing we learn from Sean’s video is that nickel, not lithium, is the largest single raw material cost in high-energy-density Li-ion batteries. Nickel, cobalt, and lithium are all minerals that the cathode materials are made with.
His thought is that if Tesla is going to move toward becoming its own mining company, it will most likely do so around nickel, not cobalt or lithium. Also, when it comes to sourcing these minerals, Tesla is sourcing them ethically. It’s committed to sourcing responsibly produced materials, and it makes sure its suppliers provide a certification of origin as well as a description of risk mitigation practices. Tesla also performs onsite visits to try to ensure that no illegally mined or artisanal material enters Tesla’s supply chain. For more on the concerns in that regard, see this article.
My Thoughts On Sean’s Video
I fully agree with Sean and I wanted to provide some insight as well. I am a gem and mineral collector — I have a small collection (I even have a rare opal with trace amounts of uranium in it!) and got into this from my wire art. In fact, I tweeted some random minerals to Elon Musk before I seriously got back into writing. It was fun. He even told me once that his favorite mineral is iron pyrite, which is fool’s gold and oddly an actual ore of gold.
— Elon Musk (@elonmusk) June 17, 2018
From my perspective, I can see other ways Tesla could bring in profits from the mines. It depends on what the mines actually produce, but there are cases where mines produce more than one mineral. This isn’t an idea just for Tesla, but also The Boring Company, which could make bricks of all the dirt from the tunnels to help with housing. Our planet is rich with minerals, and minerals are all popular collectors’ items.
People buy crystals, minerals, and gems for various reasons. If Tesla gets into the mining industry and ends up with minerals besides what it needs, it could sell them to wholesalers across the world that specialize in the sale of minerals or need them for other purposes.
When I had my store in 2016, I met a representative of a mine in Nigeria who brought me a variety of emeralds and tourmalines. He explained to me that many mines produce many minerals and that even though the owner of that mine solely wanted to focus on emeralds, he realized that the profits from other minerals were vast and started selling those as well.
All in all, if Tesla gets into the mining industry, it could not only save the company some money, but when you consider that Elon Musk is well known for revolutionizing industries he gets into, it would be interesting to see how Tesla influenced this one.