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Tesla reported that it has signed its first nickel supply agreement in the U.S., Talon Metals Corp’s Tamarack mining project in Minnesota.
Under the terms of the agreement, which Talon reported came after “extensive and detailed” due diligence and “lengthy negotiations,” Tesla will buy 75,000 tons (165 million pounds) of nickel for six years, with an option to increase the tonnage delivered.
Based on the current nickel price, the deal is nominally worth more than $1.5 billion. Iron and cobalt byproducts from the proposed mine are also part of the deal. Tamarack is currently the only high-grade nickel project under development in the United States and is a joint venture between Talon and Rio Tinto.
Talon’s team has taken an innovative approach to battery materials discovery, development and production, including permanent carbon storage as part of mining operations and investigating innovative battery materials extraction.
Last July, Tesla signed nickel supply agreements with BHP in Australia for about 18,000 tons of nickel per year and Prony Resources in New Caledonia for about 42,000 tons of the metal.
This agreement is the beginning of an innovative partnership between Tesla and Talon for the responsible production of battery materials directly from mine to battery cathode. Talon is committed to meeting the highest standards of responsible manufacturing that is fully traceable and has the lowest embedded CO2 footprint in the industry.
Talon needs to begin commercial production at Tamarack by the end of 2025, which can be extended by agreement of the parties for up to 12 months.
The Tamarack project, located 210 miles north of Minneapolis and 89 miles west of Duluth, consists of the Tamarack North and Tamarack South projects, with approximately 31,000 acres of private land and state leases.
