America's top-selling electric vehicle manufacturer is cranked up about getting battery power from northeastern Minnesota.
Tesla and Talon Metals Corp. have entered into an agreement under which Talon would supply nickel concentrate to Tesla from the proposed Tamarack Nickel Project in Aitkin County.
“We're really excited about it,” Todd Malan, Talon Metals chief external affairs officer said Tuesday. “I think the partnership with Tesla affirms that the nickel and other battery materials in the Tamarack deposit are important to the U.S. EV battery supply chain.”
Supporters say the agreement is a major step in proving the value of northeastern Minnesota non-ferrous mining projects in moving the nation forward in the production of electric vehicles and clean energy.
“If the automakers are going to meet the Biden administration goals by 2030, these are the sort of deals that the automakers have to do,” Malan said.
Nickel, copper, cobalt, platinum, palladium and other metals needed for electric vehicles and clean energy development are abundant in northeastern Minnesota.
However, after decades of exploration, planning and permitting, there's still not a non-ferrous mine in operation.
Rep. Dale Lueck of Aitkin applauded the agreement.
“This is great news for our region of Minnesota,” Lueck said in a statement. “It's a clear indication that the project is viable, and will ultimately produce the nickel needed to manufacture batteries for tens of thousands of electric vehicles. The Tamarack Project, as it moves forward, is going to be an integral part of a very positive economy here in this part of Minnesota.”
Under the agreement, Tesla would over six years buy 75,000 metric tons of nickel concentrate (165 million pounds) from the Tamarack project to help produce electric vehicle batteries.
The agreement calls for Talon Metals to begin production at the project by Jan. 1, 2026.
However, the agreement could be extended a year beyond that date.
“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,” Henri van Rooyen, Talon chief executive officer said in a news release. “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. Talon is excited to support Tesla's mission to accelerate the transition to renewable energy.”
Under the agreement, Tesla also has preferential rights to negotiate buying additional nickel concentrate from the Tamarack project.
“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,” Drew Baglino, Tesla SVP of Powertrain and Energy Engineering. “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.”
Exploratory drilling began in 2002 at the Tamarack site about 54 miles west of Duluth.
So far, about 10.7 million tons of 1.3 percent inferred and indicated nickel deposits are estimated at the site.
Talon says it's the only undeveloped high-grade nickel deposit in the nation that could create a domestic supply of nickel for electric vehicle battery manufacturing.
Exploratory drilling is continuing at the site, according to Talon officials.
Permitting for the project has not yet begun.
Tesla, owned by Elon Musk, far and away leads the nation in the sales of electric vehicles.
Musk in 2020 publicly called for the production of nickel at mining operations across the world to support EV battery production.
Lueck said the Tesla-Talon agreement validates that nickel can be produced at Tamarack for EV battery manufacturing.
“This agreement shoots a gaping hole in the recent unfounded speculation by anti-mining groups and some individuals that attempt to discredit Talon's stated goal of producing mineral resources that will be used in the manufacture of future electric vehicles,” Lueck said. “Electric vehicles alone won't resolve climate change issues, but they will certainly contribute to a cleaner environment.”
United Steelworkers (USW) in July 2021, forged a workforce training partnership with Talon that would help train workers for jobs at the project.
USW International President Tom Conway said Tuesday that the Tesla-Talon deal is an important step forward for the mining project, providing the security and stability of a long-term customer.
“As we look to the future, it's clear that nickel will be an essential component to the battery technology powering the clean economy,” Conway said in a statement. “USW members are proud to source this and other critical minerals domestically so that we can ensure a stable supply chain for this emerging industry. Mining has long supported Minnesota's communities. We look forward to working with Talon to responsibly operate its Tamarack mine so that mining continues to provide both needed resources and good jobs well into the future.”
A project labor agreement for the mining project could be signed soon, Malan said.
Two other major minerals projects, PolyMet Mining Corp. and Twin Metals Minnesota, are in development in northeastern Minnesota.
Using a Tesla 3 as an example, northeastern Minnesota's Duluth Complex holds enough copper to manufacture 310 million electric vehicles, enough nickel for more than 200 million electric vehicles, and enough cobalt for more than 42 million electric vehicles, according to MiningMinnesota, a non-ferrous mining support group.