Tesla has inked its first U.S. nickel supply deal, with Talon Metal Corp., reports Reuters.
Nickel is seen as a key component in electric vehicle batteries to increase energy storage, and demand is projected to surge in the decades to come as EVs are set to go mainstream.
Tesla will get nickel from Talon Metal’s Tamarack mine project located in Minnesota, a joint project with Rio Tinto expected to begin in 2026. The deal means Tesla will get a U.S. nickel source for its upcoming Gigafactory in Texas and also existing battery factory in Nevada.
Talon Metal’s process for mining nickel will be carbon neutral, which is what Tesla CEO Elon Musk has been demanding, opposed to nickel mining practices in leader Indonesia, which are energy-intensive and polluting for waterways.
“Responsible sourcing of battery materials has long been a focus for Tesla,” said Drew Baglino, Senior Vice President, Powertrain and Energy Engineering, at Tesla, in a press release.
The deal means Tesla seeks 75,000 tonnes of nickel concentrate over six years, along with a smaller supply of iron ore and cobalt. It remains unclear where Tesla will refine the nickel from Talon Metal, as no nickel refineries exist in the U.S. yet.
“Talon is excited to support Tesla’s mission to accelerate the transition to renewable energy,” said Henri van Rooyen, Talon’s CEO, in a statement.
Shares of Tesla closed up 3% for the day, at $1,058.12, while Talon Metals, listed on the Toronto Stock Exchange, saw trading halted amid the news.
Back in March 2021, Tesla signed a deal to buy nickel from New Caledonia, plus another deal inked in October. In July of last year, Tesla secured a nickel supply deal with Australia’s BHP.
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