Elon Musk Has a Major Surprise
The billionaire CEO might build a facility to produce electric-vehicle batteries in an unexpected country.
He is certainly unconventional.
And Elon Musk, the whimsical serial entrepreneur, often appears where you least expect him to be.
Knowing this as they do, fans and detractors of the world's richest man still are often taken aback by his moves. Consider one of his latest efforts, part of his strategy to become a global visionary and leader.
The government of Mongolia has just announced that it has held virtual discussions with the billionaire about Tesla (TSLA) - Get Free Report investing in and expanding to the country.
"A productive and insightful discussion with @elonmusk today, exploring opportunities for mutual collaboration," Mongolian Prime Minister Luvsannamsrai Oyun-Erdene said on Twitter on June 7. "We discussed potential partnerships, including securing internships for talented Mongolian engineers at @Tesla.
"We discussed the possibility of welcoming @Tesla to #Mongolia and the potential use of #copper and #rareearth elements in #electricvehicle and battery production for industrial-scale mining."
Mongolia: Enormous Untapped Mineral Resources
The virtual meeting took place on June 5.
The prime minister also said that they committed to further discuss cooperation on the development of green technologies, education, investment in the Asian country, and the use of electric vehicles.
"It was an honor to speak," Musk responded.
Mongolia is a landlocked country -- that is to say without access to the sea and wedged between two giants: Russia and China.
Schematically, the country is crossed in the north by a vast plain of steppes and marked in the south by the Gobi, which is a cold desert. Mongolia's soils are not conducive to agriculture.
But if the soil is poor, Mongolia benefits from a very rich subsoil, with copper, coal, gold, iron, uranium, rare earths, and ores useful for building wind turbines, electrical circuits and solar panels. The mining sector represents a quarter of the country's economy. The northeast Asian country is often referred to as Asia's geological vault.
The Mongolian subsoil also is noteworthy for having been poorly explored. Mongolia is thus one of the last frontier zones in mining, where discoveries of major deposits, relatively easy to exploit, are still possible.
Potential Benefits for Tesla Expansion to Mongolia
The virtual meeting between Musk and Oyun-Erdene is part of a list of the billionaire's appearances on the geopolitical scene since May.
He was received as a guest by French President Emmanuel Macron, who is trying to persuade him to invest in France. He recently discussed artificial intelligence during a virtual interview with Israeli Prime Minister Benjamin Netanyahu. And he visited China for two days, holding discussions with senior Chinese officials on artificial intelligence in particular.
In a separate statement, the Mongolian government indicates that the prime minister "expressed his support for the tax and legal environment if Tesla branch is established in Mongolia." The country is ready to offer tax breaks and other public aid to the electric vehicle manufacturer if it were to expand into the country.
"He also asked Elon Musk to start research on the joint use of copper and rare earth elements, which are the main raw materials of Tesla's products, to support the electric engine for large-scale mining vehicles, and to initiate a scholarship program to train Mongolia's best IT engineers."
Getting hold of minerals from Mongolia would be a big win for Tesla at a time when most automakers are looking to secure their supplies of raw materials needed in battery development.
Batteries more than anything else determine the cost of electric vehicles. And the high cost of raw materials in turn is what currently puts these environmentally clean cars out of financial reach for the vast majority of car buyers.
The two men also mentioned Starlink, the satellite internet access service developed by SpaceX, Musk's rocket and satellite company.
Starlink has become something of a soft power product for Musk. Starlink is seen as a window on the world for populations living in remote regions or landlocked areas and under dictatorships.
Oyun-Erdene also invited Musk to attend the Mongolian Economic Forum to be held in July 2023.
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