The Toronto-listed company, a joint venture with Rio Tinto over the high-grade Tamarack nickel-copper-cobalt project, will seek to supply Tesla, the world’s largest maker of electric vehicles and battery storage systems, with 75,000 mt (165 million lb) of nickel in concentrate, it said late Jan. 10.
The agreement term is more than six years or until the production and delivery to Tesla of an aggregate total of 75,000 mt of nickel in concentrate, and is linked to the official cash settlement price for nickel on the London Metals Exchange.
As of 1025 GMT Jan. 11, the London Metal Exchange three-month spot nickel price was trading at $21,430/mt ($9.72/lb).
Talon said the parties had also reached a preliminary agreement to share any additional economics from by-products that would be extracted from the nickel concentrate at the mine, including iron and cobalt.
The company said it anticipates the commencement of commercial production on or before Jan. 1, 2026, which may be extended by mutual agreement between the parties for a period not exceeding 12 months, after which Tesla’s right to terminate the agreement arises and Talon can elect to sell to other parties.
Talon owns a 51% interest in the Tamarack Nickel project and can raise its stake by 9% to 60%, it said.
Nickel supply deals expanding
According to the company's quarterly report, Tesla delivered 936,172 vehicles in 2021, a record high, an increase of 87.4% year on year.
BHP, an Australian mining giant, signed a nickel supply deal with Tesla already in July 2021, supplying Tesla with the mineral from its Nickel West asset in Western Australia.
