Car And Battery Makers Are Getting Closer To The Mining Business

Car makers and electric vehicle battery makers (often referred to as "OEMs," or original equipment manufacturers) are increasingly moving upstream in the global metals supply chain to secure units of critical minerals. OEMs do this by entering into direct mineral offtake agreements with mining companies, investing directly in mining projects, and entering into joint ventures with mining companies. This is especially a trend for securing raw materials for lithium-ion batteries. Through their upstream deals, OEMs are getting ever closer to the business of mining.

This is a notable trend because resource extraction is not a core competency of OEMs. In the past, OEMs generally contented themselves with purchasing processed materials and parts from suppliers and showed no interest in purchasing unprocessed or semi-processed raw materials or in investing in the mining business. But in the face of predictions about mineral scarcity, and in a world of geopolitical rivalry