Vale announced May 6 that it had signed a deal with electric car manufacturer Tesla to provide nickel from Canada for the United States-based manufacturing of the batteries that power the cars.
The deal was described as “long-term” but the number of years were not disclosed, nor were any financial terms.
The goal is to deliver 30 to 40 per cent of its class 1 nickel sales into the electric vehicle industry, Vale says.
“We are pleased to have the leading electric vehicle manufacturer Tesla among our customers,” said Dehsnee Naidoo, Vale’s executive vice-president of base metals. “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.”
Vale said in its press release about the deal that rounds from its Long Harbour refinery in Newfoundland and Labrador, which is where nickel concentrate from Thompson mines is processed, had a verified carbon footprint of 4.4 tonnbes of carbon dioxide per tonne of nickel produced, while pellets and powder from the Copper Cliff nickel refinery in Ontario had a verified carbon footprint of 7.3 tonnes per tonne of nickel. This includes emission generated from mining, milling and refining as well as upstream emissions from inputs.
A Vale spokesperson said it isn’t yet known whether the Tesla deal will result in increased nickel production levels being required in Thompson or in Vale’s other Canadian mines.
The president of the union that represents over 500 hourly employees at Vale’s Manitoba Operations in Thompson said the deal bodes well for United Steelworkers Local 6166 members.
“We see 10 to 15 years of solid growth out of this,” said Warren Luky. “We’re in an exciting point for the mining industry.”
Although no one can guarantee that nickel will continue to be an important part of electric vehicle batteries because it isn’t known how battery technology might change in the future, it does currently look like the expected transition towards electric vehicles and away from gas- and diesel-powered ones will be beneficial to the mining industry. Luky said that car companies may one day even buy mines where resources necessary for battery manufacturing are produced in order to ensure that they have access to the raw materials they need.
The union president also said that the price of nickel being around $13 a pound, up from about half of that at the time that Vale restructured its Manitoba Operations, shows that reducing the workforce even further after already shutting down the smelter and refinery was not the best plan, as the company is already having difficult attracting enough workers.
“It doesn’t look like [the price of nickel] is going to dip for a long time,” Luky said. “It’s going to be an interesting future. The demand for mining will be unprecedented. We’re going to be heard.”
