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Tesla Signs Nickel Supply Deal With Talon Metals, Which Aims to Make the Mining of the Raw Material for EV Batteries ‘Carbon Neutral'

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【Summary】A new agreement between electric automaker Tesla and mining company Talon Metals to supply nickel for EV batteries may help the electric automaker to realize its future goal of sustainable supply chain. Talon Metals aims to use a novel new “carbon capture” technology to suck carbon dioxide out of the atmosphere and chemically bind it to an absorbent mineral called “zeolites”. Once chemically bound, it stays locked in the material and is not released into the air.

FutureCar Staff    Jan 12, 2022 8:00 AM PT
Tesla Signs Nickel Supply Deal With Talon Metals, Which Aims to Make the Mining of the Raw Material for EV Batteries ‘Carbon Neutral'
Nickel is used in the cathode of electric vehicle batteries. Mining operations however, can be environmentally damaging.

Electric automaker Tesla continues to work on establishing a supply chain for the sourcing of raw materials for batteries, such as nickel, cobalt and lithium. For Tesla Chief Executive Elon Musk, sourcing these raw materials sustainability is important to align with the company's mission to transition the world to sustainable energy.

Now a new agreement between Tesla and mining company Talon Metals to supply nickel for EV batteries may help the electric automaker to realize its future goal of sustainable supply chain. The deal, which was announced on Monday, comes as demand for nickel is expected to rise with the auto industry's transition to electrification.

Nickel is used in an electric vehicle battery's positively charged cathode and increases a battery's energy density.

"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. "Talon is excited to support Tesla's mission to accelerate the transition to renewable energy."

The agreement between Tesla and Talon Metals is the electric car maker's first U.S. nickel supply deal. The company was chosen due to plans to mine nickel in a way it considers more environmentally friendly.

In 2020, Musk pleaded with the mining industry to produce more nickel "in an environmentally sensitive way."

The nickel mining operation in Minnesota is actually part of a joint venture with Rio Tinto Group, which is the world's second-largest metals and mining corporation. The mine is slated to open by 2026. The mine is located roughly 50 miles west of Duluth, MN.

Once operational, the nickel will supply Tesla's battery factories in Texas and Nevada, but will help tighten Tesla's supply chain. 

The world's largest nickel deposits are actually found half a world away in Indonesia, but the typical way nickel is mined in the country is environmentally damaging.

Nickel mining typically uses energy-intensive technology to extract the metal from rock found deep beneath the ground. Much of the waste rock is then disposed of in less environmentally friendly ways, including dumping it in waterways where contaminants can leach into groundwater.

However, Talon Metals aims to use a novel new "carbon capture" technology to suck carbon dioxide out of the atmosphere and chemically bind it to an absorbent mineral called "zeolites" found inside its Tamarack Nickel-Copper-Cobalt Project in northern Minnesota. Once chemically bound, it stays locked in the material and is not released into the air. 

The technology was invented by California startup CarbonCapture, which was founded in 2019. CarbonCapture's investors include the investment firm of Marc Benioff, the billionaire CEO of Salesforce.

The carbon capture technology is still being tested, but if it can be scaled successfully it would effectively let Talon market its mined nickel as "carbon neutral", which is very appealing for Musk, according to Reuters.

"Responsible sourcing of battery materials has long been a focus for Tesla," Drew Baglino, a Tesla executive, said in a press release.

Tesla plans to buy 75,000 tonnes (165 million pounds) of nickel concentrate over six years, including smaller amounts of cobalt and iron ore, at London Metals Exchange-listed prices. It's still not clear where Tesla will refine the nickel concentrate as the United States currently does have a nickel refinery.

Last year, Tesla also signed nickel supply deals with mining company BHP Group in Australia and from the French territory of New Caledonia off the Australian coast, which in the early 1970s was the second largest nickel producer in the world.

In Feb 2021, Musk tweeted about the challenges of sourcing nickel for EV batteries and wrote that it's Tesla's "biggest concern for scaling lithium-ion cell production." 

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