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Researched by Industrial Info Resources (Sugar Land, Texas)--Talon Metals Corporation (TSX:TLO) (British Virgin Islands) announced Monday it signed an agreement with Tesla (NASDAQ:TSLA) (Palo Alto, California) to supply the global electric vehicle (EV) leader with its first U.S. nickel supply for EV battery production. However, related project delays threaten to derail not just this supply agreement, but the automaker's other deals as well. Tesla is in the middle of a large buildout of electric vehicle "gigafactories" and support operations. Industrial Info is tracking nine active Tesla projects worldwide, worth $10.2 billion, which includes $1.7 billion in the U.S. and $8.5 billion in Germany.
Nickel, a key component in lithium-ion batteries used in electric vehicles, increases the vehicle range by bolstering energy storage.
Under the agreement, Talon, through its U.S. subsidiary Talon Nickel (USA) LLC, would provide 75,000 metric tons (165 million pounds) of nickel concentrate directly from its planned Tamarack Nickel Project in Aitkin County, Minnesota--a joint venture with Rio Tinto (NYSE:RIO) (London, England). The agreement would run for six years or until the total amount has been produced and delivered.
"Talon will use commercially reasonable efforts to achieve commercial production on or before January 1, 2026," the company said in a press release. That date could be extended for up to 12 months, after which Tesla has a right to terminate the agreement and Talon can sell to other parties. However, the Tamarack project, like other mining projects in the U.S., is expected to face opposition from environmental groups and local communities, which could further delay the project.
While Talon has stated the mine would have a small environmental footprint, swift opposition is expected from the Mille Lacs Band of the Ojibwe tribe. Parts of its reservation, in addition to sacred waters, are within 10 miles of the mine. The environmental concern stems particularly from possible toxic leaching of waste rock, known as tailings.
"Our concern is that groundwater flows could come into contact with that disturbed rock," Kelly Applegate, Mille Lac's natural resources commissioner, told the Star Tribune.
Subscribers to Industrial Info's Global Market Intelligence (GMI) Metals & Minerals project database can click here to see the project reports for Tamarack's grassroot mine and mill and hydrometallurgical refinery, the latter of which would extract nickel sulfate from the mine's nickel concentrate.
Talon has been in the exploration stage since 2017 and plans to complete a pre-feasibility study by the end of the year.
"Developing projects of this nature is a long, arduous process. It's not uncommon for mining projects to take 10-15 years to permit, finance and move forward," says Joe Govreau, Industrial Info's VP Research Metals & Minerals. "The pre-feasibility study will be followed by a definitive feasibility study, environmental permitting and financing, all of which will need to be completed prior to any construction activity. If a project receives local opposition, litigation can extend the process indefinitely or cease it all together."
Regardless of the mine's project status, the United Steelworkers (USW) union hailed the agreement, with USW International President Tom Conway saying it "represents an important step forward for the Tamarack mining project, providing the security and stability of a long-term customer." He added, "The USW reached its own agreement with Talon last summer to collaborate on workforce development at Tamarack."
Meanwhile, Piedmont Lithium's (NASDAQ:PLL) (Belmont, North Carolina) five-year binding sales agreement with Tesla, to supply 53,000 tons of spodumene concentrate (lithium ore mineral), also is facing hardships.
In August, Piedmont announced a mutual decision with Tesla to delay the first shipments and that it does not have a set date for when they could begin. The initial agreement, signed in September 2020, called for Piedmont to begin supplying Tesla sometime between July 2022 and July 2023, from its $580 million Bessemer City Carolina Lithium Mine & Concentrator in Gaston County. The project was expected to be under construction this spring, but now is delayed. Next to the grassroot mine and also facing a delay is a $408 million lithium-hydroxide production plant that would convert the produced spodumene concentrate into a key building block for EV batteries. Subscribers can click here for the related project reports.
BHP Group Limited (Melbourne, Australia) in July announced it signed another of Tesla's supply agreements, sourcing an estimated 18,000 tons of nickel annually from its Nickel West operations in Western Australia. At the Nickel West refinery, a Stage 1 nickel sulfate-processing facility addition was completed in July, and began commissioning to produce 100,000 tons per year. The Stage 2 addition would increase production to 200,000 tons per year and is expected to kick off in late 2024. Click here for more information.
"Demand for nickel in batteries is estimated to grow by over 500 per cent over the next decade, in large part to support the world's rising demand for electric vehicles," BHP Chief Commercial Officer Vandita Pant said in a press release.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn.
Nickel, a key component in lithium-ion batteries used in electric vehicles, increases the vehicle range by bolstering energy storage.
Under the agreement, Talon, through its U.S. subsidiary Talon Nickel (USA) LLC, would provide 75,000 metric tons (165 million pounds) of nickel concentrate directly from its planned Tamarack Nickel Project in Aitkin County, Minnesota--a joint venture with Rio Tinto (NYSE:RIO) (London, England). The agreement would run for six years or until the total amount has been produced and delivered.
"Talon will use commercially reasonable efforts to achieve commercial production on or before January 1, 2026," the company said in a press release. That date could be extended for up to 12 months, after which Tesla has a right to terminate the agreement and Talon can sell to other parties. However, the Tamarack project, like other mining projects in the U.S., is expected to face opposition from environmental groups and local communities, which could further delay the project.
While Talon has stated the mine would have a small environmental footprint, swift opposition is expected from the Mille Lacs Band of the Ojibwe tribe. Parts of its reservation, in addition to sacred waters, are within 10 miles of the mine. The environmental concern stems particularly from possible toxic leaching of waste rock, known as tailings.
"Our concern is that groundwater flows could come into contact with that disturbed rock," Kelly Applegate, Mille Lac's natural resources commissioner, told the Star Tribune.
Subscribers to Industrial Info's Global Market Intelligence (GMI) Metals & Minerals project database can click here to see the project reports for Tamarack's grassroot mine and mill and hydrometallurgical refinery, the latter of which would extract nickel sulfate from the mine's nickel concentrate.
Talon has been in the exploration stage since 2017 and plans to complete a pre-feasibility study by the end of the year.
"Developing projects of this nature is a long, arduous process. It's not uncommon for mining projects to take 10-15 years to permit, finance and move forward," says Joe Govreau, Industrial Info's VP Research Metals & Minerals. "The pre-feasibility study will be followed by a definitive feasibility study, environmental permitting and financing, all of which will need to be completed prior to any construction activity. If a project receives local opposition, litigation can extend the process indefinitely or cease it all together."
Regardless of the mine's project status, the United Steelworkers (USW) union hailed the agreement, with USW International President Tom Conway saying it "represents an important step forward for the Tamarack mining project, providing the security and stability of a long-term customer." He added, "The USW reached its own agreement with Talon last summer to collaborate on workforce development at Tamarack."
Meanwhile, Piedmont Lithium's (NASDAQ:PLL) (Belmont, North Carolina) five-year binding sales agreement with Tesla, to supply 53,000 tons of spodumene concentrate (lithium ore mineral), also is facing hardships.
In August, Piedmont announced a mutual decision with Tesla to delay the first shipments and that it does not have a set date for when they could begin. The initial agreement, signed in September 2020, called for Piedmont to begin supplying Tesla sometime between July 2022 and July 2023, from its $580 million Bessemer City Carolina Lithium Mine & Concentrator in Gaston County. The project was expected to be under construction this spring, but now is delayed. Next to the grassroot mine and also facing a delay is a $408 million lithium-hydroxide production plant that would convert the produced spodumene concentrate into a key building block for EV batteries. Subscribers can click here for the related project reports.
BHP Group Limited (Melbourne, Australia) in July announced it signed another of Tesla's supply agreements, sourcing an estimated 18,000 tons of nickel annually from its Nickel West operations in Western Australia. At the Nickel West refinery, a Stage 1 nickel sulfate-processing facility addition was completed in July, and began commissioning to produce 100,000 tons per year. The Stage 2 addition would increase production to 200,000 tons per year and is expected to kick off in late 2024. Click here for more information.
"Demand for nickel in batteries is estimated to grow by over 500 per cent over the next decade, in large part to support the world's rising demand for electric vehicles," BHP Chief Commercial Officer Vandita Pant said in a press release.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn.
