SUDBURY -- Earlier this week, Tesla boss Elon Musk called for global mining companies to boost their production of nickel, a key element in making batteries for electric cars.
"Tesla will give you a giant contract for a long period of time if you mine nickel efficiently and in an environmentally sensitive way," Musk said Wednesday, as the company announced second-quarter results. “Don’t wait for nickel to go back to some high point you experienced five years ago … Wherever you are in the world, please mine more nickel.”
Musk made the comments as Tesla is boosting its production of electric vehicles. Overall, demand for the type of nickel needed in electric car batteries grew by 28 per cent in 2019 alone.
Mining analyst Stan Sudol said if Musk needs more high-grade nickel, he need not look further than the Sudbury basin.
"Polish miner KGHM has a terrific nickel deposit – the Victoria deposit in the Sudbury Basin," Sudol said in an email to CTV News. "Why doesn’t Musk try to buy the deposit from KGHM and hire contractors to build and run his own mine? He would get nickel, copper and some cobalt for his car batteries."
Another option could be the nickel properties in the Parkin Offset Dyke in the northeastern corner of the Sudbury Basin, owned by the Sudbury Junior Miner Wallbridge
"According to the Wallbridge website, 'The quality of the mineralization found in the Parkin Offset is high. The average nickel tenor for the mineralization found within the Parkin Offset is approximately 4 per cent, which is comparable to the tenors of some deposits found in the Copper Cliff Offset dyke,'" Sudol said.
"Some of the Sudbury Basin’s biggest nickel mines, past and present are on the Copper Cliff Offset dyke, hence the importance of that statement."
Prices are low
With nickel prices low – they were about US$6.10 per pound Friday, after hitting US$8 in 2019 – Sudol said it would be a good time to invest.
"Why doesn’t Musk buy an equity position in the junior and fund to the tune of $20 or $40 million worth of exploration on the Wallbridge’s Parkin Offset Dyke," he said. "Since this is the Sudbury Basin, he will probably find a mine or two if history is any example."
Outside of the Sudbury Basin, Sudol said there is enormous mineral potential in the long-delayed the Ring of Fire in northwestern Ontario, including a mine owned by junior miner Noront Resources.
"Perhaps Musk could chat with Premier (Doug) Ford and impress on him the importance of shortening environmental assessments and building that 300-km road into the Ring of Fire," he said. "A road that is on the traditional territories of both Webequie and Marten Falls First Nations, who both want the road built."
He also lists Thompson, Man., Newfoundland’s Voisey's Bay and Quebec’s Raglan nickel mines as options.
"As the old saying goes, the best place to find a new mine is in the shadow of the headframe," Sudol said. "So I wish Elon Musk the best, but please stop complaining about a possible nickel shortage and perhaps start strategically investing in the nickel sector instead."