- Deal talks around Tesla acquiring Nevada-based mining company Cypress Development Corp. have fallen through, Bloomberg first reported.
- As the company shifts its plan, it now has the rights to mine Lithium on its own in the state, according to the report.
- The automaker has access to 10,000 acres of “lithium-rich clay deposits,” in Nevada, where the company already has a Gigafactory.
- The company hopes producing Lithium on a large scale will help keep battery costs low and enable it to finish a $25,000 Tesla in “about three years.”
- Visit Business Insider’s homepage for more stories.
Tesla was recently holding acquisition talks with a Nevada-based mining company to advance its ambitious plan to source lithium from clay deposits in the US, but the electric-car company was unable to reach a deal and has since secured the rights needed to legally mine the raw material on its own in the state, Bloomberg’s Yvonne Yue Li and David Stringer reported Monday.
The mining of lithium is a key part of Elon Musk’s vision for Tesla’s future manufacturing process as the Tesla CEO looks to scale up his supply chain in pursuit of less-expensive and longer-lasting batteries. Musk has said that doing so will give the company a competitive advantage as electric cars become increasingly common. He also has said it will cut costs and enable a $25,000 Tesla to be built and sold.
In the past, the automaker had planned to buy the mining company, Cypress Development Corp., which is also looking to source lithium from Nevada land, Bloomberg reports. Tesla already has a Gigafactory in the state.
Cypress Development Corp. declined to comment on the report. A Tesla spokesperson did not immediately respond to a request for comment on the deal talks or mining rights.
Musk maps out a lithium-filled future
During the company’s “Battery Day” in September, Musk announced that Tesla has access to 10,000 acres of “lithium-rich clay deposits.”
Musk said during the presentation that Tesla plans on mixing clay with salt, and then adding water. From there, the salt would “leach out” lithium, Reuters reports. The clay would then be returned to the earth.
If successfully executed, it would mark the first time a company has produced the metal from clay on a commercial scale, according to Reuters.
Right now, lithium is commonly mined in South America or Australia. In South America, it is normally harvested into a brine, after being pulled from underground salt flats, according to Wired. In Australia, the lithium is mined from rocks, and then turned into a concentrate called spodumene, as reported by Reuters.
Nevada’s climate could pose some issues for the company’s proposed lithium-mining process, as cattle ranchers in the state rely on underwater reserves which Tesla may have to tap into as well in order to produce the large quantity of lithium, Reuters reported.
It’s worth noting that lithium batteries aren’t uncommon, and are often found in phones, laptops, and other electronics, but are found in very small volumes within these devices.
“This plan from Tesla brings up a lot more questions than it answers,” Chris Berry, president of a consulting firm that works with the lithium industry, told Reuters. “Are we just supposed to take Elon Musk’s word for it that the cost will be lower than existing lithium projects?”
Timing could be another issue for the company, according to Reuters. Tesla wants to have the $25,000 model on the market “about three years from now,” according to Musk, but some familiar with the industry told Reuters it may take more time to get lithium production started.
“If Tesla really wants to fly solo, we’re talking about four to five years to really see any kind of lithium production,” Pedro Palandrani, research analyst with Global X Lithium & Battery Technology ETF, which has shares in both Tesla and lithium producers, told Reuters.
You can read the original report on Tesla’s acquisition talks and mining rights over at Bloomberg.