How New Mines Could Break U.S. Reliance on China’s Batteries

Along the Nevada, Oregon border sits the McDermott Caldera, where hidden in the clay is EU s s largest deposit of lithium. And 1700 miles away is the Tamarack project. Home to one of the country’s only sources of high grade nickel, this is the highest grade rock I’ve ever held in my career. The US is now investing billions to mine these battery minerals and build up enough domestic supply to break its reliance on China, which currently dominates global battery production. We can’t build a future that’s made in America if we ourselves are dependent on China for the materials that power the products of today and tomorrow. Here’s how two projects are digging in despite the challenges, hoping to change the battery metal supply chain. Right now, the supply chain for these minerals spans the globe. Australia mines 48% of the world’s lithium and Indonesia extracts 50% of global nickel. Once mined, a majority of both are sent to China, along with other battery metals for processing. Much of that material then remains there to be put into batteries. Today, China produces more than 85% of the world’s batteries. Any nation wants to have control over its source of energy and control over its raw materials that go into National Defense. And right now, we’re dependent on countries that potentially could be rivals. Here you go. It’s now low. 2022’s Inflation Reduction Act seeks to change that, with billions of dollars in subsidies meant to bring all of this within US borders, both for the energy transition and national security. The law includes a $7500 tax credit for people who buy electric vehicles with batteries containing minerals source from these countries, but not bees. Battery makers and automakers are now working hard to comply and to get product more products to qualify, they’re even taking their money straight to the source. In General Motors case, that’s this 18,000 acre section of the McDermott Caldera called Thacker Pass. The ultimate product that comes out of there is 40,000 tons of lithium carbonate every year. That’s going to be enough to to put into about a million General Motors electric vehicles every single year. The carmaker committed $650 million towards the Thacker Pass project last year, giving it exclusive rights to all of the lithium mine here for up to 15 years, which lithium Americas will extract using a process other lithium mines don’t. One the company has been testing for years. We’re going to take raw ore, We’re going to feed it into these pieces of equipment. This slurry is separated, then leached with a sulfuric acid, all part of a process that isolates the lithium through this circuit. What we’re removing is magnesium sulfate. Magnesium sulfate is bath salts. You could furnish all the spas in the world with the magnesium sulfate that we’re removing until finally and then we end up with high purity lithium carbonate and up in Tamarack, MN. If you zoom out, you can see the intrusion. Talon Metals has been exploring, recording and mapping this polymetallic deposit mainly made-up of nickel. So these are the holes that we drill with our drill rigs to understand what’s underneath our feet and then this is the deposit. And So what we can do with this is essentially identify the areas that are valuable to extract. Talon estimates there are 17,000,000 metric tons of nickel mineralization sitting within the deposit. So the deposit is quite special. It’s not the largest in the world by any means, but it is very high grade. This piece would run about 9% nickel. And when you move this around, basically everything that flashes is the nickel mineralization. 1% is considered high grade, so 9% were significantly higher than what’s considered high grade. And some of this nickel already has a big name buyer. Any mining companies out there please mine more nickel. Two years after that call, Tesla committed to purchasing 75,000 metric tons of Talon’s future product. Enough nickel for an estimated 1.2 million Tesla Model YEVS. Taken together Tamaracks, nickel and Thacker passes, lithium would mean billions in savings for Tesla and GM buyers. But these mines aren’t open yet, and speed bumps are emerging. It’s been an awful 2024 for Tesla. With Protect electric vehicles prices are just too high. EV sales growth has nearly stalled out in the US in the past year. That slowdown has weighed heavily on battery metal prices. Nickel is down 26% since early 2023. Lithium is down more than 80%, making mining projects less economically viable. It means that projects are being delayed. It means that some projects are being sidelined. Lithium is by no means a rare resource, but getting it out of the ground is what’s so challenging, and we’ve seen here in the US that it’s essentially impossible to get a project permitted. Securing the permits needed to open a mine in the US can often take up to 10 years, three times more than other countries, according to the National Mining Association. We’ve spent more than a decade getting to where we are today. The Tamarack deposit was discovered in 2008. Mining projects including Thacker Pass and Tamarac have also faced opposition from environmental and local Native American groups. Talon Metals even moved to plan nickel processing facility out of the state. Now for some people that’s not going to be enough, but at least we hope that people feel that we have been listening and that we’ve taken action to do something about it as we plan the mine. Talon hopes to deliver nickel to Tesla in 2028. Lithium Americas is now fully permitted and will start production in 2027. Still, it’s going to take more than these initial plans to create a reliable domestic mineral supply. We have found one deposit, but we’re finding mineralization in these other areas as well. I can definitely see Tamarack growing in the future. Our deposit is within an area that’s the largest in the world. So expansion opportunities, they’re quite good.