Tesla Inc.agreed to purchase nickel supplies from minerTalon Metals Corp.as an expected surge in demand spurs automakers to secure access to battery metals and other electric-car parts.
Tesla committed to purchase 75,000 metric tons of nickel concentrates produced from Talons Tamarack project, with the price linked to the London Metal Exchanges cash-settlement price for nickel, Talon said in astatementMonday. Tamarack, a nickel, copper and cobalt joint venture between Talon andRio Tinto Group, is located in Minnesota and isnt yet in commercial production.
Teslas billionaire boss, Elon Musk, has repeatedly expressed concern about future supplies of nickel due to challenges in sustainable sourcing, with demand set to skyrocket as the world increasingly moves toward electric vehicles. The agreement with Talon comes less than six months after Teslastrucka nickel-supply deal with BHP Group.
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, Drew Baglino, the senior vice president of powertrain and energy engineering at Tesla, said in the statement.
The announcement also follows a flurry of activity among carmakers securing supplies of nickel and other materials needed to produce batteries that will power the green-energy transition.BHP, the worlds biggest miner,saidMonday it will buy a minority stake in a Tanzanian nickel project as it expands its footprint, andGeneral Motors Co.last monthsaidit will build a plant to make magnets using rare-earth materials supplied byMP Materials Corp.
The Biden administration haspledgedto invest in U.S. domestic manufacturing and move away from reliance on adversaries for critical inputs. In October, Teslasaid higher prices of nickel were having an impact on battery cells.
Talon said it will use commercially reasonable efforts to achieve commercial production by Jan. 1, 2026 at the Tamarack project, which may be extended by the agreement of the parties for up to 12 months.
Rio Tinto is working to support Talon to bring the Tamarack mine into production, as we strengthen our battery materials portfolio, Rio Tinto Minerals Chief Executive Sinead Kaufman said in a statement. We look forward to seeing it supply Tesla with nickel that is essential for the production of their electric vehicles.