Read more on Tesla’s plans to lock in supply as battery demand booms

Nickel is a key component in lithium-ion batteries, used in electric vehicles. It packs more energy into batteries and allows producers to reduce use of cobalt, which is more expensive and has a less transparent supply chain.

Telsa has struck a string of deals with mining companies for the commodities it needs to make batteries, including cobalt pacts with Glencore Plc and supporting a nickel venture in New Caledonia.

For BHP, it marks a turnaround for the company’s Nickel West business. The company unsuccessfully tried to sell the unit in 2014 and has since pivoted it to serve battery makers, rather than traditional customers such as the stainless steel industry.

Bloomberg originally reported that the two companies were in talks in October.