Tesla’s billionaire boss, Elon Musk, has repeatedly expressed concern about future supplies of nickel due to challenges in sustainable sourcing, with demand set to skyrocket as the world increasingly moves toward electric vehicles. The agreement with Talon comes less than six months after Tesla struck a nickel-supply deal with BHP Group.
The announcement also follows a flurry of activity among carmakers securing supplies of nickel and other materials needed to produce batteries that will power the green-energy transition. BHP, the world’s biggest miner, said Monday it will buy a minority stake in a Tanzanian nickel project as it expands its footprint, and General Motors Co. last month said it will build a plant to make magnets using rare-earth materials supplied by MP Materials Corp.
The Biden administration has pledged to investment in U.S. domestic manufacturing and move away from reliance on adversaries for critical inputs. In October, Tesla said higher prices of nickel were having an impact on battery cells.
Talon said it will use “commercially reasonable efforts” to achieve commercial production by Jan. 1, 2026 at the Tamarack project, which may be extended by the agreement of the parties for up to 12 months.
“Rio Tinto is working to support Talon to bring the Tamarack mine into production, as we strengthen our battery materials portfolio,” Rio Tinto Minerals Chief Executive Officer Sinead Kaufman said in a statement. “We look forward to seeing it supply Tesla with nickel that is essential for the production of their electric vehicles.”