US carmaker Tesla has announced plans to annually invest more than $1bn on lithium, nickel and other metals mined in Australia for its batteries and vehicles.

Tesla chairman Robyn Denholm said that already three-quarters of its lithium feedstock and more than a third of its nickel are sourced from the country.

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Denholm further added that Australia was missing out on a valuable role in the supply chain across the globe.

The country is rich in minerals that are used for batteries such as lithium and nickel.

Due to the lack of a strong refining sector locally, large amounts of battery raw materials are typically shipped to faraway places for further processing and converted into products such as battery cells in China and other countries in Asia, The Sydney Morning Herald reported.

Reuters quoted Denholm as saying at a Minerals Council of Australia event: “Australian mining companies do have a good reputation, great expertise, professionalism and are preferred by manufacturers increasingly concerned about meeting both today’s and the future’s ESG requirements.”

Government figures have revealed that the country’s exports of hard rock lithium are expected to hit $773m (A$1bn) in 2021 while its nickel exports could be valued at $3bn (A$4bn).

In October 2020, Tesla said it was in talks with BHP Group regarding a nickel supply deal as part of its efforts to increase nickel production and avoid a supply crunch, Bloomberg reported citing people familiar with the matter.

Prior to this, Tesla carried out discussions with Canadian firm Giga Metals regarding the development of a large mine to get access to low-carbon nickel for its batteries.