A mineral mine can be “backed” by both the US President and the world’s richest billionaire
The future of American-made electric vehicle batteries can be found in a modest warehouse in Tamarack, Minnesota. Beneath bright fluorescent lights, long cylinders of stone are housed in a cardboard box, containing the millions of pounds of nickel that Tesla pledged to buy on Jan. This commitment demonstrates the understanding of electric car manufacturers.
Brian Goldner, director of Talon Metals, an exploration and mining company, examined one of the newly drilled rock formations from hundreds of meters below the Earth’s surface. “More than nine percent,” he said of the unusually high metal content. “Is crazy”.
In 2020, Tesla’s Elon Musk encouraged miners to “please mine more nickel” and offered a “huge contract” to anyone who could sustainably follow the project. The problem is urgent because nickel is a key ingredient in the production of electric vehicle batteries. Due to soaring demand, geopolitical tensions and a lack of new supplies, the amount of premium nickel needed to make batteries for electric vehicles is becoming scarce.
According to Goldman Sachs, the world faces a shortage of premium nickel by 2021. The situation will increase by 2022 and quadruple, to more than 800,000 tons by 2030. Impact of the shortage that is becoming increasingly clear. In March, Tesla raised the price of its nickel-battery car by $1,000 because of rising raw material costs.
In Tamarack, located 50 miles west of Duluth, the ore body stretches over 11 miles and 31,000 acres is described as “the only high-end development stage nickel project in the US”. The site is expected to begin mining in 2026, a year after the country’s only currently-used nickel mine in Michigan is scheduled to shut down.
The timing is right, especially for policymakers and U.S. battery manufacturers hungry for a sustainable source of nickel. According to the White House, global demand for nickel sulfate, a high-grade ore containing metal pure enough for batteries, will increase from 200,000 to 3 million tons a year by 2040.
Currently, production of high-grade nickel is not nearly enough to keep up with the global number of electric cars, which are expected to grow from about 13 million today to 677 million by 2040. will probably be supplied to American car and battery manufacturers. For example, Russia also supplies 20% of the world’s grade 1 nickel. So far they have not cut off supply to customers, but this could still change.
The Joe Biden administration has been worried about supply chain constraints due to tensions in Ukraine. Recent events have further clarified the thinking of the White House, while the US accounts for only 0.64% of total global nickel production.
As a result, at the end of March, the US invoked the Defense Production Act to boost domestic production of critical materials used for electric vehicles. Among the measures outlined are “environmentally responsible domestic extraction and processing”.
When nickel is mined from sulfide ores such as those at Tamarack, the waste is often exposed to air and water. The chemical reaction can produce sulfuric acid and toxic metals that can leach into the water and harm plants, animals and humans.
A 2012 review of 14 copper sulfide mines over 89% of U.S. copper production found that 13 had uncontrolled pollution levels. The damage can be enormous, with decades of acidic mining waste that has turned areas of Butte, Montana, into one of the Superfund sites, a program designed to investigate and clean up the sites. America’s largest contaminated site with toxic substances.
In Butte and many other former mining sites, cleanup costs can run into the billions of dollars, often borne by taxpayers. Paula Maccabee, advocacy director and advisor for Water Legacy, a nonprofit founded to oppose sulfide mining in northern Minnesota, argues that at the legal level, there are few lessons to be learned. draw from these failures. “Minnesota and federal regulators have shown they are ill-equipped to control the environmental impacts of sulfide mining,” she said.
The White House’s interest in mining also brought more attention to the practice from Native American tribes. Mining companies have long caused environmental damage in or near tribal lands, often without their approval. The growing development of electric vehicles may make history repeat itself.
A 2021 analysis by MSCI found that the majority of the US’s metal-to-energy reserves are within 35 miles of Native American lands. For nickel, the count is 97%. In particular, Tamarack is home to two federally recognized tribes specializing in wild rice cultivation.
Tesla hasn’t commented on the Tamarack project, but that doesn’t mean the company isn’t interested. For example, in recent years, members of Minnesota tribesmen have protested against oil pipelines, causing disruption and reputational damage to their owners. If Tesla plans to mine it, they will suffer the same consequences, affecting their “sustainable” company reputation.
For its part, the Talon company doesn’t care what happens. The company is “listening to community concerns about mining in a multi-country region”. If it wants to meet its goal of starting mining by 2026, then Talon will need to address those concerns. “We only have one chance at building a mine with the backing of both US President Joe Biden and Elon Musk.” If Talon succeeds in that mission, the US will go one step further towards achieving its zero-carbon ambition.
Refer to Bloomberg
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