[Asia Economy Reporter Yujin Cho] On the 30th (local time), major foreign media reported that Tesla, the No. 1 electric vehicle company in the United States, discussed acquiring shares of Glencore, a multinational mining and raw materials trading company headquartered in Switzerland, to secure raw materials.
According to multiple sources cited by foreign media, Tesla CEO Elon Musk began preliminary discussions last year to purchase 10-20% of Glencore's shares.
When Glencore CEO Gary Nagle visited Tesla's Fremont factory in California in March this year for a performance briefing (roadshow), he held discussions with Musk regarding the acquisition, but no agreement was reached.
Foreign media reported that the failure to reach an agreement at that time was due to concerns about whether Glencore's extensive coal mining operations could coexist with Tesla's environmental goals as an electric vehicle company.
Glencore, which owns mines in Congo, Australia, and Canada, is the world's largest producer of cobalt and counts SK Innovation, Samsung SDI, BMW, and General Motors (GM) among its clients.
Tesla has built a cooperative relationship since signing a supply contract in 2019 with Glencore for 6,000 tons of cobalt produced from mines in Congo. The cobalt supplied by Glencore has been used in Tesla's Shanghai and Berlin factories.
Musk has expressed his intention to directly engage in mining and refining operations as he faced difficulties securing raw materials due to the global supply chain collapse and soaring raw material prices caused by the COVID-19 pandemic.
In April, Musk mentioned on Twitter that lithium prices have increased eightfold since early 2021, stating, "Unless the (lithium) high-cost structure improves, Tesla may actually have to directly enter mining and refining businesses."
Analysts were skeptical about Musk's actual willingness to invest in mining companies or raw material trading firms, but as electric vehicle production surges and competition among automakers to secure raw materials intensifies, the possibility is becoming more realistic.
In fact, reports have continued that Tesla is pushing forward with the construction of a lithium refining plant, a key raw material for electric vehicle batteries.
Bloomberg and CNBC reported last month that Tesla is conducting an internal review to establish a lithium refining facility through documents submitted to the Texas state government, and it was confirmed that Tesla sent a letter stating that if government approval is obtained, construction could begin within the fourth quarter with a goal to operate within two years.
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