Future BMWs to be made from Rio Tinto aluminium

BMW and Rio Tinto have signed a new deal that will see the Australian mining giant supply the German premium brand with Canadian-sourced aluminium for use in the construction of its SUVs at the Spartanburg plant in South Carolina.

While BMW is very much German (Bavarian) in its origins and operations base, the bulk of the X-badged SUV portfolio is actually produced in the US.

Rio Tinto says the low-carbon primary aluminium from its hydro-powered operations in Canada could generate a CO2 reduction of up to 70 per cent compared to the BMW Group’s benchmark for aluminium when combined with ‘recycled content’.

The new arrangement will start off with field experts from both bodies collaborating on how to best embed these low-carbon solutions into the BMW Group’s supply chain without impacting on product quality.

BMW board member for purchasing and supplier network, Joachim Post, said the brand has clear goals for lowering CO2 emissions and that using “innovative materials” can help reduce BMW’s carbon footprint before vehicles are handed over to customers.

“The agreement to supply low-carbon aluminium is based on several pillars: in addition to hydroelectric power and secondary material, we also want to lead the automotive industry by ramping up our use of aluminium with no direct CO2 emissions from the smelting process,” he said.

Rio Tinto chief commercial officer Alf Barrios was equally enthusiastic, adding the company’s “world-leading position in responsible aluminium production” means it can offer innovative solutions to its “customers on their decarbonisation journey toward net zero”.

The BMW-Rio deal is the latest in several partnerships signed recently between car-makers and Australian mining companies, which are seen as attractive due to their ethical business practices and Australia's favourable tax laws.

Tesla and Magnis Energy Technologies have just signed a new supply deal for 52,500 tonnes of battery materials over three years from 2025, with the option to up the yearly quota from 17,500 to 35,000 tonnes if vehicle production increases.

Magnis says it will source the anode active materials from its Tanzanian operation and ship them to a new lithium-ion battery AAM manufacturing plant being planned in the US.

The new alliance, which reports say could be worth billions of dollars and may help power up to 500,000 Tesla EVs annually, will formally commence in February 2025.

Last year General Motors tapped Queensland Pacific Metals to supply EV battery materials, Stellantis teamed up with Western Australia’s GME Resources and Ford struck a deal with lithium miner Liontown Resources.

Prior to that, Tesla signed a five-year deal with Piedmont Lithium in 2020 and Toyota partnered with BHP – Australia’s biggest mining company – to supply battery materials in 2021.

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