DULUTH — A junior mining company hoping to open an underground mine in Aitkin County has agreed to provide nickel to the largest electric car manufacturer.

Talon Metals Corps and Tesla Inc. on Monday, Jan. 10, said they had reached six-year agreement that Tesla would buy 75,000 metric tons (165 million pounds) of nickel concentrate from Talon's proposed underground mine planned for just outside Tamarack, the companies announced in a news release Monday.

Tesla will buy the mineral, which is used in its car batteries, for a price based on the London Metals Exchange's official cash settlement price for nickel, the release said.

Talon Metals senior environmental scientist Joni Torgerson walks by the company’s custom-painted Tesla electric SUV on Oct. 26, 2021. Talon plans to mine nickel for use in the batteries used in electric vehicles.
Steve Kuchera / Duluth News Tribune
Talon Metals senior environmental scientist Joni Torgerson walks by the company’s custom-painted Tesla electric SUV on Oct. 26, 2021. Talon plans to mine nickel for use in the batteries used in electric vehicles. Steve Kuchera / Duluth News Tribune

The deal requires Talon begin shipping the concentrate before Jan. 1, 2026.

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However, Talon has yet to begin the permitting process. Talon said it intends on beginning that process, which could take years, in 2022, the News Tribune reported in November.

The process took 14 years for PolyMet, which has proposed a large, open-pit, copper-nickel mine and processing facility near Hoyt Lakes and Babbitt, to earn its permits in 2018, only to have several of them put on hold because of legal challenges that remain ongoing.

The release said the companies "will work together to optimize nickel concentrate grades and metal recoveries" and will share in any byproducts like iron and cobalt.

“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," Henri van Rooyen, CEO of Talon, said in the release.

In the same release, Drew Baglino, senior vice president of powertrain and energy engineering at Tesla, said, "Responsible sourcing of battery materials has long been a focus for Tesla, and this project has the promise to accelerate the production of sustainable energy products in North America."

Like other proposed copper-nickel mines throughout Northeastern Minnesota, environmentalists are worried about the potential for acid forming when sulfides meet oxygen to leach into the environment. The mine would sit within the Mississippi River watershed.

Gary Meader / Duluth News Tribune
Gary Meader / Duluth News Tribune

Tentative plans for Talon's $400 million mine include an underground mine with 450 employees reaching depths of around 1,700 feet, with a series of switchbacks from the surface for vehicles or conveyors to reach the bottom below the ore body. The nickel, copper and other metals would then be processed and some of the waste rock, or tailings, would be mixed with concrete and pumped back into the mined-out areas while the rest would be dry-stacked above ground.

The company is also planning to capture carbon from the atmosphere and then pump it into the tailings that are returning underground for permanent storage.

Talon's deposit, the Midcontinent Rift’s Tamarack Intrusive Complex, was detected by a Minnesota Geologic Survey plane looking for anomalies through a geophysical magnetic survey in the 1970s. That was followed up by exploratory drilling and the results were published in 1986. It drew the attention of Kennecott, the exploration arm of global mining giant Rio Tinto.

By 2000, Kennecott had state mineral leases and began exploring. In 2008, the company was ready to call it quits. But on what company officials said was supposed to be the last drill, they found a significant amount of nickel a few miles north of Tamarack.

But the recession killed metal prices and exploration there slowed. By 2014, Talon started to buy into the project. It became Kennecott’s designated operator for the exploration, and in 2019, entered into an agreement to acquire up to a 60% interest in the Tamarack project. In September 2021, Talon reached a 51% interest in the project.

The deal with Talon is dependent on Talon reaching that 60% interest in the project, beginning commercial production and the two companies negotiating supply terms and conditions, the companies said.

Rock core samples sit on a long table at Talon Metals on Oct. 26, 2021.
Steve Kuchera / Duluth News Tribune
Rock core samples sit on a long table at Talon Metals on Oct. 26, 2021. Steve Kuchera / Duluth News Tribune