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Tesla signs deal to source nickel for battery production from upcoming new mine in the US –

January 10
Fred Lambert
– Jan. 10th 2022 4:28 pm PT

Tesla has signed a new deal to source nickel for battery cell production from an upcoming new mine in the United States. It’s a landmark deal to start sourcing the critical battery material in the US and help boost upcoming new mining projects.

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Over the last few years, Tesla CEO Elon Musk has been pushing for nickel producers to boost production as he expects the resource could become a bottleneck for battery production.
The company gets its nickel overseas. Vale, the Brazilian mining giant, is Tesla’s main nickel supplier, and the company has recently done a big deal to secure nickel supply from New Caledonia. But, North American production of nickel is limited, and Tesla is not sourcing locally.
There are several new projects in the work as demand for nickel is expected to explode. The EV market is already affecting the nickel industry despite BEVs representing less than 4% of the global auto industry.
Nickel prices went up 85% in the last years. By the end of the decade, it is expected that EV nickel demand could jump from 5% to 59% of overall nickel supply. This is not sustainable, and it is going to require many new nickel mines to open.
Talon Metals, which is working on just such an endeavor in central Minnesota – called Tamarack Project – announced today that it signed a deal with Tesla to supply the automaker with 75,000 metric tonnes (165 million pounds) of nickel in concentrate.
Henri van Rooyen, CEO of Talon, commented on the deal:
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 CO2 footprint in the industry. Talon is excited to support Tesla’s mission to accelerate the transition to renewable energy
Drew Baglino, SVP of Powertrain and Energy Engineering at Tesla, added:
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
Talon Metals shared the main details of the deal:
The Tamarack project is expected to enter its production phase in 2026.
A major electric automaker like Tesla deciding to support a project to establish a local supply chain for nickel is a good signal for junior nickel miners in North America.
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Tesla is a transportation and energy company. It sells vehicles under its 'Tesla Motors' division and stationary battery pack for home, commercial and utility-scale projects under its 'Tesla Energy' division.

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