ECONOMY

Elon Musk boosts Larco’s outlook

elon-musk-boosts-larco-s-outlook

The next few months will determine the future of Larco, Greece's state mining and metallurgical company founded in 1963, but this month's tenders for its assets will likely be boosted by the founder and chief executive of Tesla Inc, Elon Musk.

It will all boil down to how attractive the tenders will be to investors –e. the tender that started a few days ago for the sale of the mines at Evia, Kastoria and Fthiotida and the parallel tender that state privatization fund TAIPED will launch today for the long-term concession of the factory at Larymna.

The appointment of a special administrator last March came with the obligation for the sale of the company's assets in case no investor is found; this decision was aimed at putting an end to more than three decades of Larco's problematic operation that has cost the state and its creditors more than half a billion euros.

The good news concerning this difficult attempt is that it is taking place at a time when demand for its main output, nickel, is soaring thanks to its use for a new generation of batteries.

Recently, Elon Musk told investors what sounded like an urgent call for more nickel production: "Any mining companies out there, please mine more nickel. OK. Wherever you are in the world, please mine more nickel and don't wait for nickel to go back to some… high point that you experienced some five years ago… Go for efficiency, obviously environmentally friendly nickel mining at high volume. Tesla will give you a giant contract for a long period of time, if you mine nickel efficiently and in an environmentally sensitive way. So hopefully this message goes out to all mining companies."

Each Tesla Model 3 car contains about 30 kilos of nickel in its batteries.

In different circumstances, all this would have rendered Larco a precious asset, as it is the sole nickel producer in the European Union and one of the five biggest in the world. However, the chronic problems that the company has had for decades mean any investor will need to pour in hundreds of millions of euros in investments to ensure the its sustainable operation in both financial and environmental terms.