Mining giant, Vale, has confirmed a long-term contract with Tesla to provide Class 1 nickel for its electric vehicles. This agreement is in accordance with Vale’s strategy to boost exposure to the electric vehicle industry, emphasising its low-carbon footprint and its position as North America’s largest producer of finished Nickel. The company said that it signed a long-term contract with Tesla to supply Class 1 nickel from its operations in Canada.  

 Deshnee Naidoo, Vales executive vice president of base metals, highlighted how pleased Vale was to partner with the electric vehicle manufacturer:

‘’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’’

This comes just a month after the news that Canada is investing $2 billion in its mineral strategy for the electric vehicle battery supply chain.  

The deal was first reported by Bloomberg in March, when Vale Canada announced plans to supply nickel to a Swedish battery manufacturer, Northvolt AB. Around 5% of Canadas nickel production is put towards electric vehicle plans, but Vale aim to deliver 30% to 40% of Class 1 nickel sales into the EV industry. The company aims to expand its industry, and the agreement with Tesla is a step forward for the electric vehicle sector.  

Vale’s Canadian operations pride themselves in being the producer of the lowest-carbon nickel globally. Data from its Long Harbour refinery in Newfoundland and Labrador in 2020 had a verified carbon footprint of 4.4t CO2 equivalent per tonne of nickel. In comparison, pellets and powder from the Copper Cliff Nickel Refinery in Ontario had a verified footprint of 7.3t equivalent.  

Tesla has spent the last few years making agreements with several producers of battery metals, with a particular focus on companies that produce nickel and lithium. CEO Elon Musk had promised in 2020 that giant contracts would only be signed with those who produce nickel in an ‘’environmentally sensitive way’’ foreshadowing the concerns of the increasing demand for nickel. 

The deal with companies such as Vale, marks the transition to a choice of low-carbon and high purity nickel and the commitment to sustainability from both Tesla and Vale.