Talon Metals has signed an agreement with Tesla Inc. to supply nickel concentrate from Minnesota for the automaker’s batteries.
Talon, a Toronto Stock Exchange-listed base metals company, is in a joint venture with international mining giant Rio Tinto on the high-grade Tamarack Nickel Project in Aitkin County. Talon currently owns a 51% interest in the project and has the right to increase its interest by 9%.
"This agreement is the start of an innovative partnership between Tesla and Talon for the responsible production of battery materials directly from the mine to the battery cathode. Talon is committed to meeting the highest standards of responsible production that is fully traceable and that has the lowest embedded carbon dioxide footprint in the industry. Talon is excited to support Tesla's mission to accelerate the transition to renewable energy," said Henri van Rooyen, CEO of Talon.
"The Talon team has taken an innovative approach to the discovery, development and production of battery materials, including to permanently store carbon as part of mine operations and the investigation of the novel extraction of battery materials. Responsible sourcing of battery materials has long been a focus for Tesla, and this project has the promise to accelerate the production of sustainable energy products in North America," said Drew Baglino, SVP of powertrain and energy engineering at Tesla.
Having long-life rechargeable batteries is necessary to achieve long term success in the electric vehicle (EV) industry. Environmentalists believe transitioning to EVs is key to reducing greenhouse gasses and global warming, and President Joe Biden is promoting efforts to quickly make that happen. Reaching that goal will require the expanded development of mineral resources.
Tesla has committed to purchase 165 million pounds of concentrated nickel from the Tamarack Nickel Project. Tesla also has the right to negotiate an amount above the initial commitment. The mining firm hopes to launch production by Jan. 1, 2026, a timeline no other mining company has been able to achieve with Minnesota regulators. Beyond the time needed to obtain mining permits, Talon faces the prospect of opponents filing multiple legal challenges, as environmentalists have done with the proposed PolyMet nonferrous mining project.
At issue is the potential creation of acid runoff when water and oxygen make contact with nonferrous minerals. It’s a Catch 22 because millions of tons of copper and nickel are needed for the transition to green energy and green products. Those minerals are needed in windmills, electric vehicle motors, transformers, batteries and the wiring that connects them. Mining underground, however, lessens a mine’s environmental impact and its external footprint. Further, producing nickel concentrate rather than processed nickel removes additional barriers in Minnesota.
The growing drive to replace gas motor vehicle engines with electric motors has led to a scarcity of nickel needed for batteries.
“As EV battery demand goes up, it has put tremendous pressure on the supply chain,” said Todd M. Malan, Talon’s chief external affairs officer and head of climate strategy.
Talon and Tesla said they will work together to optimize nickel concentrate grades and metal recoveries. Talon indicated it has entered into an agreement with the United Steelworkers to work with and support one another. Having that relationship in place will help keep the project on schedule and successful, Malan said.