Tesla Inc has struck a deal to buy nickel concentrate from miner Talon Metals as the electric car maker establishes supply agreements with domestic U.S. battery metal producers, Bloomberg reported.
Talon said in a statement on Monday that Tesla has committed to buy 75,000 tonnes of nickel concentrate produced at Talon’s Tamarack project at a price pegged to the London Metal Exchange’s cash-settled nickel price. Tamarack is a joint nickel, copper and cobalt project between Talon and Rio Tinto Group located in Atkin County, Minnesota.
“Rio Tinto is working hard to support Talon in bringing the Tamarack mine into production as we strengthen our battery materials portfolio,” Rio Tinto Mining chief executive Sinead Kaufman said in a statement. “We look forward to seeing it provide Tesla with the nickel that is critical to its electric vehicle production.”
The announcement comes as the Biden administration has pledged to invest in U.S. domestic manufacturing and to wean itself off its reliance on key inputs from adversaries. In October, Tesla said that rising nickel prices had an impact on batteries.