While automakers around the world are setting bold goals for vehicle electrification, many in the industry are looking at nickel — an integral part of most lithium-ion batteries — as a major hurdle.

While there is enough nickel in the ground to support a major advance of EVs, there aren’t enough planned mining projects or processing facilities to make the type of high-quality nickel needed for EV batteries.

Meanwhile, the nickel content in battery cells is only increasing, according to Mark Beveridge of Benchmark Mineral Intelligence. That’s because more nickel means energy density.

“We’re moving towards, you know, 90 percent of the cathode is nickel for certain specific cell types,” Beveridge said.

Russia has a lot of high-quality nickel and the invasion of Ukraine has sent prices soaring to record highs amid fears of supply disruptions, leading the London Metal Exchange to suspend nickel trading for a week.

Meanwhile, the US is short of domestic nickel resources. The Eagle Mine in Michigan is the nation’s only primary nickel mine and is expected to close in 2025.

Enter the proposed Tamarack mine in Minnesota, which is being developed by Talon Metals and mining giant Rio Tinto. While the permitting process has yet to go through, Talon has already entered into a supply agreement with Tesla to get Tamarack nickel into EV batteries.

Talon Metals employees observe a core sample on site at the company’s proposed nickel mine in Tamarack, Minnesota

Talon Metals

Elsewhere, however, the project pipeline for new high-value nickel mines has largely dried up, and communities often resist proposals for new mining projects.

The Tamarack mine is no exception.

Paula Maccabee, a Minnesota attorney who serves as Advocacy Director and Counsel for the nonprofit WaterLegacy, has questions. “How much nickel ends up in our drinking water? Where does that toxic nickel go when an underground mine has holes and cracks?”

Different types of nickel deposits

Currently, most of the world’s nickel is used in the stainless steel industry. Beveridge estimates that batteries make up just over 10% of total demand, although that balance is expected to shift rapidly in the coming decades.

“If we look 10 to 15 years ahead, we are actually looking at a future where the battery industry could supply more than 50 percent of the demand for nickel units by then.”

But not all nickel is high-quality enough for use in EV batteries – it has to be supposedly “class one” nickel, with a purity of at least 99.8%. No nickel is so pure by nature; it all needs to be refined. But the higher the quality of the original nickel deposit, the easier and less energy it takes to process it.

The site of the proposed Tamarack mine is a high-grade nickel sulfide deposit.

“You know, we’ve seen some of our numbers up to 12 percent nickel, which is very high globally. Those are some of the highest numbers I’ve ever seen in my career,” said Brian Goldner, Chief Exploration and Operations Officer at Claw .

Nickel sulfides are usually found deep in the earth and are extracted through underground mines. Currently, the US sources most of its nickel sulfides from Canada, Norway, Australia and Finland, but very few new sulfide mines are in the works.

Additional nickel can come from laterite, a lower quality but more common nickel ore that is found near the Earth’s surface and is mined through opencast mining. Indonesia and the Philippines mine the most laterites, while Australia and Brazil also have large reserves.

A nickel laterite mine in New Caledonia.

Getty Images

The problem is that upgrading low-grade nickel laterites for use in EV batteries involves extremely energy-intensive processes, such as high-pressure acid leaching, in which laterite ore is heated to an extremely high temperature, mixed with sulfuric acid and pressurized. .

“The carbon footprint would be about 15 to 20 times greater than what we can do with a down payment like you have with the Tamarack project,” said Henri van Rooyen, CEO of Talon Metals.

That’s one of the reasons why many in the EV industry think it’s important to develop new nickel sulfide mines, especially in the US and related countries like Canada, Beveridge says.

“Not only does it potentially bring the offering closer to an end user, a North American end user in the future, but it also gives that end user the ability to say they are using a cleaner source of nickel, which is clearly good for their marketing. ” of their product.”

But if domestic automakers all want to source nickel from these less carbon-intensive mines, Beveridge says there’s just not enough supply to make ends meet at the moment. He thinks the government should encourage automakers to extract nickel from sulfide mines rather than laterite mines, encouraging more exploration and mining development.

Overall, however, mining is just one step in the intricate nickel supply chain. After nickel is mined, it is often sent to another country to be refined or converted to nickel sulfate, and then sent abroad again for battery assembly. All this transport just adds to the carbon intensity of the whole process.

While there are plans for domestic nickel refineries under development, the US currently has none. So even if Tamarack is operational by the target date of 2026, that nickel can still be shipped around the world before it ends up in U.S. EVs.

Environmental Concerns and Alternatives

Before anything else, the Tamarack mine has to go through the environmental assessment and permitting process. And there’s no guarantee this will be as quick and easy as Talon hopes.

The main concern with sulphide mining is possible pollution of the surrounding groundwater and surface water. In Minnesota, lawsuits have kept another proposed copper sulfide mine in the environmental review and permitting process for 17 years. Maccabee, who has served as a prosecutor in several of these lawsuits, says the Tamarack project has known concerns.

“There’s a lot of community gatherings and a lot of public relations. But when the community has asked, what’s the evidence? Where’s your hydrological evidence of where the pollution would go…? They haven’t received any information at all.”

Talon hopes to begin the environmental assessment process early next year, after which the public will have access to the information Maccabee wants. But she is concerned that unless all data is released in advance, regulators and the public will prematurely back the project.

If Talon faces pushback and community delays, it could result in the deal with Tesla being annulled. The automaker could walk away from the deal if the mine is not operational by 2026.

Adrian Gardner, Principal Nickel Analyst at Wood Mackenzie, thinks that’s too ambitious a target. “It was much earlier than would be possible, in our view feasible, to allow approval and construction.”

But Gardner believes that unlike mining, lithium-ion battery recycling could yield a fertile and more sustainable nickel supply anyway. While this technology is still fairly new, battery recycling companies such as Li-Cycle and Redwood Materials have already partnered with major automakers.

Pallets with depleted lithium-ion batteries at JB Straubel’s Redwood Materials are ready for recycling.

“In the US alone, there are at least five or six companies, each of which has its own proprietary technologies,” Gardner says, though he doubts recycling alone will provide all the nickel needed. “Will it be enough to cover the total demand for EVs? I doubt it, but it goes along with the traditional technologies available and used today.”

Even as battery recycling increases and becomes cheaper, mining for nickel will still be part of the equation. The Tamarack project, if allowed, would only make a small dent in the global nickel shortage. But the Talon team hopes this project will help prove that mining can be done in an environmentally friendly way.

“I would like our teams to be able to say that we found it. We developed it… Environmentally friendly, socially responsible metals,” said Van Rooyen, “And that it powers our vehicles and that these metals are recycled in the next battery and the next battery So I will be long gone and these metals will still be alive.

Watch the video to learn more about nickel mining and see how work is going on at Talon Metal’s planned mine in Tamarack, Minnesota.


This post Why Elon Musk and Tesla Invest in a Minnesota Nickel Mine? was original published at “https://www.cnbc.com/2022/03/19/why-elon-musk-and-tesla-are-banking-on-a-minnesota-nickel-mine.html”

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