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Why Elon Musk and Tesla are banking on a Minnesota nickel mine


As automakers around the world set bold targets for vehicle electrification, many in the industry are looking to nickel — an integral component of most lithium ion batteries — as a major hurdle.

Although there is sufficient nickel in the ground, it’s not possible to build the kind of high-grade mining or processing facility that would be required for EV battery production.

According to Mark Beveridge, Benchmark Mineral Intelligence, nickel in batteries is on the rise. Because more nickel equals higher energy density.

Beveridge explained that we are moving toward nickel as the cathode for some cell types, which is 90 percent.”

Russia contains a great deal of high-grade Nickel, invasion of UkraineHas sent prices soaring to record highs due to fears of supply disruptionsEven the London Metal Exchange was able to take advantage of this. suspend nickel trading for a week.

Meanwhile, there is a dearth of nickel resources in the United States. Michigan’s Eagle Mine is home to the nation’s only primary nickel mineIt is expected to close in 2025.

You can enter the Tamarack Mine proposed in Minnesota. It is currently being developed by Talon MetalsMining giant Rio Tinto. It is still in the permit process. Talon has already secured a supply deal with TeslaTo convert Tamarack nickel to EV batteries

Talon Metals workers observe an onsite core sample at the proposed nickel mine of Tamarack in Minnesota.

Talon Metals

Elsewhere, however, the pipeline for projects to build new high-grade nickel mines is largely dry up. Residents often oppose new mining plans.

Tamarack is not an exception.

Paula Maccabee (a Minnesota lawyer who is the Advocacy director and Counsel at the non-profit WaterLegacy) has many questions. What amount of nickel could be in the water we drink? What will happen to the toxic nickel if underground mining has fissures and gaps?

Diverse types of nickel deposits

Currently, the majority of the world’s nickel is used in the stainless steel industry. Beveridge says that only 10% of the total market is battery-based, although that number will likely shift in the next decade. 

Looking forward for 10-15 years we can see a future when the battery sector will be able to supply over 50 percent of nickel unit demand.”

But not all nickel is high quality enough for use in EV batteries — it needs to be so-called “class one” nickel, with at least 99.8% purity. There is no nickel that can be this pure from nature. All of it must be processed. The higher the nickel content, the more energy and time it takes to refine it.

A high-grade deposit of nickel sulfide is located on the Tamarack site.

You know that some grades have seen nickel levels up to 12 percent, which is high globally. Brian Goldner is Chief Exploration and Operation Officer of Talon. “Those are some the most high grades I have ever seen,” he said.

The nickel sulfides can be found in deep underground areas of the earth and are usually extracted from underground mines. At the moment, the U.S. sourcesIts nickel sulfides make up the majority of its overall content Canada, Norway, Australia, and FinlandHowever, there are not many new sulfide mining projects in progress.

Laterite could contain additional nickel, an inferior but much more common form of nickel that is found close to the surface of the Earth and mined through open-pit mining. Indonesia and the Philippines mine the most lateritesWhile Australia and BrazilAlso, large amounts of reserves are available. 

New Caledonia’s nickel laterite mine.

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Low-grade nickel laterites are difficult to upgrade for use in EV-batteries. This is because it requires extremely high energy consumption, such as high pressure acid leachingLaterite ore is heat-treated to a very high temperature. It’s then mixed with sulfuric acids and pressure-pressed. 

Henri van Rooyen CEO, Talon Metals, stated that the CO2 footprint of the project would exceed the amount we could do with a deposit such as the Tamarack one.

Beveridge suggests that it is important for many in the EV market to create new nickel sulfide mining facilities, in particular in the United States and allied nations like Canada.

The end user can say they use a cleaner nickel source, which will be a benefit to their product marketing.

Beveridge believes that the current supply of nickel is not sufficient to meet demand if all domestic carmakers want to use these lower-carbon mines. According to Beveridge, the government might need to encourage automakers to choose sulfide over laterite nickel mines to increase exploration and promote mine development.

Mining is just one part of the complicated nickel supply chain. Once nickel has been extracted, it is usually sent to another country for refinement or transformation into nickel sulfurate. Then, nickel is shipped again overseas to be assembled. This all adds to carbon intensity.

There are many other ways to make money, Are there plans domestic nickel refineries developmentThe U.S. doesn’t currently have any. Even if Tamarack becomes operational in 2026, the nickel could still be shipped to other countries before it reaches American EVs.

Alternatives and environmental concerns

The environmental review and permit process for Tamarack’s Tamarack mine must be completed before anything else. It’s not certain that the permitting process will take as little time as Talon expects.

One of the biggest concerns with sulfide mines is possible pollution of nearby groundwater. In Minnesota, lawsuits have kept a different proposed copper-sulfide mine stuckFor 17 years, he has participated in the permitting and environmental review process. Maccabee is a former plaintiff in several of these lawsuits and believes that Tamarack presents familiar problems.

There are many community meetings, and there is a lot done in public relations. When the community asks, “What is the evidence?” You have no hydrologic evidence to show where pollution is going ….?. “They have not received any information.”

Talon expects to begin the process of environmental review by the beginning of next year. At that point, the public can access the Maccabee-requested information. However, she is worried that without all of the information being released in advance, the regulators will not support the project.

Talon may face delays and community criticisms that might lead to the termination of its agreement with Tesla. If necessary, the automaker may opt to walk away. mine isn’t up and running by 2026.

Adrian Gardner, Wood Mackenzie’s Principal Nickel Analyst, believes that this is an ambitious goal. It was much earlier than we thought possible for construction and permitting approval.

Gardner thinks that recycling lithium-ion batteries, rather than mining, would provide more sustainable and fruitful nickel supply. Even though this technology remains relatively new, many battery recycling companies including Redwood Materials or Li-Cycle are already using it. partnershipsWith major automakers.

The Redwood Materials at JB Straubel has a large stock of used lithium-ion batteries that is ready to be recycled.

“There are five to six US companies, with their respective technologies,” Gardner states. However, he is skeptical that just recycling will supply all of the nickel required. It will not be enough to satisfy the total demand for EVs. It is, however, in conjunction with existing traditional technologies.

Even though battery recycling becomes more cost-effective, the mining of nickel will continue to play a role in this equation. If the Tamarack project is allowed, it would make only a tiny dent to global nickel shortage. The Talon team believes that the project will prove that it is possible to mine in an eco-friendly manner.

It would be great if our teams could say they found it. Van Rooyen explained, “We developed it… Environmentally-friendly, socially responsible metallics. And that it drives our vehicles. These metals will also be recycled into new batteries. This means that I will soon be gone, but these metals are still alive. 

To learn more about Nickel Mining and see what is happening at Talon Metal’s Tamarack mine, Minnesota, watch this video.