Tesla signs nickel supply deal with Talon Metals
Tesla has concluded another supply contract for nickel. The company now agreed with Talon Metals Corp. to supply at least 75,000 tonnes of nickel concentrate from the US state of Minnesota over a period of six years.
How much Tesla will pay for this amount of nickel concentrate is not clear from the Talon Metals announcement. The material, which is important for batteries with a high energy density, is to be mined at Talon’s Tamarack mine in Minnesota. Talon says it is working on a process to extract CO2 from the atmosphere and bind it in the rock at the Tamarack mine. This means that – depending on the energy used – the nickel mined there could be CO2-neutral on balance.
“Talon is committed to meeting the highest standards of responsible production that is fully traceable and that has the lowest embedded CO2 footprint in the industry,” said Talon CEO Henri van Rooyen.
Drew Baglino, senior vice president of powertrain and energy engineering at Tesla, adds, “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.”
For Tesla, it is not only the first nickel deal with Talon, but also the first with a US company. In the past year, the US carmaker has placed two publicly disclosed nickel orders: In July, an undisclosed amount was ordered from BHP from a mine in Western Australia. In October, it became known that Tesla had ordered 42,000 tonnes of nickel from Prony Resources in New Caledonia.
The US carmaker’s battery strategy is to switch its volume and base models to cheaper but less energy-dense LFP (lithium iron phosphate) cells. However, the particularly range- or high-performance variants are to receive cathodes with a high nickel or manganese content, while the use of cobalt is to be reduced further and further.
In the past, Tesla boss Elon Musk had repeatedly called on nickel producers to increase their mining quantities in an environmentally friendly way. However, Musk had described the US production of nickel as “objectively very lame”.
The world’s largest nickel producer is Indonesia, with 24 per cent of global nickel deposits in the country, according to data compiled by BloombergNEF. However, according to Reuters, very energy-intensive mining methods are usually used in Indonesia, and the overburden is often simply disposed of in bodies of water.