Tesla buying low-carbon nickel from Vale
Battery-grade nickel to come from Canadian mines, refineries Metal Tech News - May 6, 2022
Last updated 5/6/2022 at 11:44am
The rumors are true, Tesla Inc. will be buying nickel for the lithium-ion batteries powering its vehicles from Vale's Canada operations.
"We are pleased to have the leading electric vehicle manufacturer Tesla among our customers," said Vale Executive Vice President of Base Metals Deshnee Naidoo.
A Brazil-based mining company with operations around the globe, Vale is the world's largest nickel producer.
Under a long-term contract confirmed by both companies, Vale will supply Tesla's battery gigafactories in the United States with nickel from its mines and refineries in Canada.
Rumors that Vale and Tesla were working on a nickel supply agreement go back to 2020. Last year, an executive at Vale confirmed that the Brazilian miner was having conversations with Tesla and others about ensuring there is enough nickel available to meet battery demand in the coming years.
Tesla was particularly interested in nickel from Vale's operations in Canada, which include the Voisey's Bay mine and Long Harbour refinery in the province of Newfoundland and Labrador, Sudbury operations in Ontario, and the Thompson mine in Manitoba.
These Canadian mines and refineries produce what is considered some of the lowest-carbon nickel produced globally. This is due to the nickel sulfide ore at these mines requiring less energy to convert to battery-grade nickel sulfate than laterite ores that are the source of much of the world's nickel and the abundance of hydropower available to Vale's Canadian operations.
The low carbon dioxide footprint of these operations makes the nickel attractive to Tesla and other EV manufacturers that want to minimize the CO2 emissions going into vehicles meant to prevent additional greenhouse gasses from entering the atmosphere.
"This agreement reflects a shared commitment to sustainability and shows very clearly we are the supplier-of-choice for low-carbon and high purity nickel products essential for long-range batteries," Naidoo commented on the Vale supply contract with Tesla.
Leveraging its low-carbon footprint and market-leading position, Vale has a strategy to deliver 30 to 40% of class one nickel sales into the fast-growing EV sector.
More information on nickel markets and Vale's Canadian operations can be read at Miners answer Musk call for more nickel in the Critical Minerals Alliances magazine published by Data Mine North.