Bloomberg Línea — Stellantis (STLA), the parent company of brands including Fiat, Jeep, Maserati, Peugeot and Citroën, is seeking mining assets to ensure supply of raw materials for the production of electric cars.
The group this week announced a $155-million investment in a copper project in Argentina and, in addition to the mineral, the automotive giant is also eyeing lithium assets in the region, the president of Stellantis for South America Antonio Filosa said in an interview with Bloomberg Línea.
The move represents another step in the race by the world’s largest automakers to secure raw material supplies for fleet electrification plans.
General Motors (GM) announced earlier this month a $650 million investment in a lithium project in the United States., while Tesla (TSLA) is eyeing Brazilian mining company Sigma Lithium, which has exploration operations in Minas Gerais, according to Bloomberg News.
The strategy is crucial for the auto industry in order to raise production volumes of electric cars. As demand for such models increases, the risk of shortages of raw materials such as copper and lithium, used in the production of batteries and other components, is growing.
“Just like copper, lithium is also of great interest to us for the future. We have a 360-degree view of the opportunities, and we are doing a risk analysis on the supply of these raw materials required directly in battery production,” Filosa said.
Stellantis has acquired a 14.2% stake in McEwen Copper, a subsidiary of the Canadian mining company McEwen, which owns the Los Azules project in Argentina and the Elder Creek project in Nevada, US. With the transaction, the automaker becomes McEwen Copper’s second-largest shareholder alongside mining giant Rio Tinto.
“We are looking at Brazil, Chile, Argentina and other countries in South America where there are important reserves, as well as other places in the world. We are more advanced in some projects, others not so much, but we will not stop there,” Filosa said.
According to the assembler, the Los Azules project plans to produce 100,000 tons of copper per year of the cathode type with 99.9% purity, starting in 2027, and the reserves ensure the mine’s operation for at least 33 years.
The guaranteed supply of raw material for the automaker is one of the main drivers of the operation, Filosa said.
Demand set to triple
The search for raw materials for the production of electric car batteries has led to an overvaluation of lithium assets, which gives a price advantage to copper projects, which are much cheaper, according to financial market agents.
Amid this enthusiasm, Brazilian mining giant Vale is preparing to sell a minority stake of its base metals business, with an eye on the demand for this type of raw material by automakers.
The mining company recently announced the hiring of former Tesla executive Jerome Guillen to the company’s independent base metals board, in yet another sign that these two industries should increasingly deepen ties.
Filosa said demand for copper will be ever increasing. “The investment is intended to provide security for the group globally for the future supply [of copper], which will be increasingly in demand for cars. This raw material will become scarcer and this is the time to invest.”
Global demand for the commodity will triple in the coming years, the automaker estimates, noting that Los Azules is one of the 10 largest global copper projects under development. According to Filosa, the Argentine mine will supply an important part of Stellantis’ demand worldwide.
Strategic plan
The strategic plan of the Stellantis group, called “Dare Forward 2030″, foresees achieving a 100% electric vehicle share in the passenger car sales mix in Europe and 50% in the United States (including light commercial vehicles) by the end of this decade.
In Brazil, the share of low-emission vehicles in the group’s mix will be approximately 20% by 2030.
“Our goal is to reduce CO2 emissions and reach 2038 as a carbon-neutral company. In the main markets where we operate, electrifying our fleet is one of the ways to achieve this goal,” said Filosa.