Tesla (NASDAQ: TSLA) and Talon Metals Corporation (TSX: TLO) finalized a deal on Monday stipulating Tesla would buy 75,000 tonnes of nickel from the mining company over a six-year period. According to an article by Mining.com, this will be Tesla’s first U.S. supply agreement for nickel, utilizing Talon’s significant Tamarack mine project in Minnesota. The project is located 210km north of Minneapolis and 89km west of Duluth and is a joint venture between Talon and Rio Tinto.
Using current nickel price to estimate, the agreement is likely to be valued at an excess of US$1.5B. The deal also states that Tesla is entitled to any iron and cobalt by-products of the nickel mine. It is hoped commercial production at Tamarack will commence by 2025.
“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,” said Henri van Rooyen, CEO of Talon.