GM wants a piece of Vale’s base metal spinoff, Tesla’s nickel supplier

General Motors (GM) has advanced to the next round of bidding for a stake in Brazilian mining company Vale’s base metals spinoff.

According to a new report from Bloomberg, GM is in serious discussions with the mining giant for a minority stake in its newly established business.

Vale is the largest producer of Iron Ore and Nickel, with contracts to supply OEMs like Tesla, Northvolt, and GM. However, as the transition toward zero-emission electric vehicles accelerates, Vale wants to take advantage of the growth.

Vale sits on a gold mine of resources used for electric vehicle batteries, including Nickel and Copper. The mining company has been debating different strategic strategies to unlock the value behind its base metals business.

Its primary Iron Ore business is very different than the base metals division. Base metals are a growth opportunity, with a 50% increase in Nickel demand and a 29% growth in Copper demand per year (between EV and renewables growth) by 2030, according to the miner.

During Vale Day 2022, hosted in December, management said the base metals business has “a lot of good value propositions” but needs a change in how it’s managed, specifically with a board.

Vale said it was in advanced talks with potential “high profile” partners, those with “deep EV transition experience,” and looked to finalize a deal by the first half of 2023.

Sources familiar with the matter told Bloomberg GM has advanced to the next round of bidding for a stake in Vale’s base metals business.

GM is among other major organizations, such as Saudi Arabia’s Public Investment Fund and Mitsui & Co., looking for a piece of the nickel and copper business.

The news comes shortly after GM announced it would be making an equity investment of up to $650 million in Lithium Americas to help establish the most extensive known lithium source in the US as it enters stage two of its EV rollout, according to the automaker.

The project is expected to support the production of one million EVs annually with production slated to begin in early 2026.

Electrek’s Take

GM is building out its EV supply chain to support future production. With three commited battery cell plants (and a potential fourth), a massive lithium investment, and a potential stake in Vale’s base metals business, GM is clearly looking to establish a vertical supply chain to give itself a path to hit its goal of selling one million EVs by 2025.

Although the deal is not finalized, it gives you a good idea of what GMs future business plans. We’ll update you on the situation as it progresses.

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