BREAKING! Tesla Just Signed a 75,000 Tone Nickel Deal for Its 4680 Battery Production

Tesla will buy 75,000 tones of nickel over six years from Talon Metals to build its 4680 new batteries. Tesla also agrees to buy cobalt and iron ore from Talon.

Nickel is crucial for Tesla's 4680 battery production.

The deal between Tesla and Talon Metals was signed today and comes at a time when EV battery mineral prices are expected to jump as electric vehicles go mainstream and demand increases.

Reuters reports that Tesla Inc (TSLA.O) has signed its first U.S. nickel supply deal, choosing Talon Metals Corp's (TLO.TO) Tamarack mine project in Minnesota due to plans to make the electric vehicle battery metal in a way it considers more environmentally friendly.

“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. Talon is excited to support Tesla’s mission to accelerate the transition to renewable energy,” said Henri van Rooyen, CEO of Talon.

Tesla Talon Metals Agreement Highlights.

Under the terms set out in the agreement, Tesla has committed to purchase 75,000 metric tonnes (165 million lbs) of nickel in concentrate, representing a portion of the metals projected to be produced from the Tamarack Nickel Project. Tesla also has a preferential right under the agreement to negotiate the purchase of additional nickel concentrate over and above the initial 75,000 metric tonne commitment.

The term of the agreement is six (6) years or until a total of 75,000 metric tonnes (165 million lbs) of nickel in concentrate has been produced and delivered to Tesla. The agreement is conditional upon: (i) Talon earning a 60% interest in the Tamarack Nickel Project; (ii) Talon commencing commercial production at the Tamarack Nickel Project; and (iii) the parties completing negotiations and executing detailed supply terms and conditions. Talon will use commercially reasonable efforts to achieve commercial production on or before January 1, 2026 at the Tamarack Nickel Project, which may be extended by the agreement of the parties for up to 12 months following which Tesla has a right to terminate the agreement and Talon may elect to sell to other parties.

Talon and Tesla will work together to optimize nickel concentrate grades and metal recoveries.

The purchase price to be paid by Tesla for the nickel in concentrate will be linked to the London Metals Exchange (LME) official cash settlement price for nickel. The parties have also agreed to share in any additional economics derived from by-products extracted from the nickel concentrate, such as iron and cobalt.

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This is Armen Hareyan from Torque News. Please follow us at https://twitter.com/torquenewsauto on Twitter and https://www.torquenews.com/ for daily automotive news.

Reference
Talon Metals https://talonmetals.com/tesla-and-talon-metals-enter-into-supply-agreement-for-nickel/
Reuters https://www.reuters.com/business/autos-transportation/tesla-signs-deal-first-us-supply-nickel-with-talon-metals-2022-01-10/

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