Why Tesla and GM Are Making a wager on U.S. Mines Now | WSJ

– Along theNevada/Oregon border sits the McDermitt Caldera, where hidden in the clay, is the US' largest deposit of lithium. And 1,700 miles away isthe 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 isnow investing billions to mine these battery minerals and build up enough domestic supply to break its reliance on China, which currently dominatesglobal battery production. – We can't build a future that's made in America if we are ourselves are dependenton China for the materials that power the productsof today and tomorrow.

– Here's howtwo projects are digging in despite the challenges, hoping to change thebattery metal supply chain. Right now, the supplychain for these minerals spans the globe. Australia mines 48% of the world's lithium and Indonesia extracts50% of global nickel. Once mined, a majority ofboth are sent to China, along with other batterymetals 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 havecontrol over its source of energy and control over its raw materials that go into national defense. And right now, we'redependent on countries that potentially could be rivals.

– There we go, it's now law.(crowd cheering) – 2020s Inflation Reduction Act seeks to change that, with billions of dollars in subsidies meant to bring all ofthis within US borders, both for the energy transitionand national security. The law includes a $7,500 tax credit for people who buy electricvehicles with batteries containing minerals sourcedfrom these countries,.

But not these. – Battery makers and automakers are now working hard to comply and to get more products to qualify. – They'reeven taking their money straight to the source. In General Motors case, that'sthis 18,000 acre section of the McDermitt Calderacalled Thacker Pass. – The ultimate productthat comes out of there.

Is 40,000 tons of lithiumcarbonate every year. That's gonna be enough to put into about a millionGeneral Motors Electric Vehicles every single year. – The car makercommitted $650 million towards the ThackerPass project last year, giving it exclusive rights to all of the lithium minedhere for up to 15 years, which Lithium Americas willextract using a process.

Other lithium mines don't, one the company hasbeen testing for years. – We're gonna take raw ore and we're gonna feed it intothese pieces of equipment. – This slurry is separated then leached with the sulfuric acid, all part of a processthat isolates the lithium – Through this circuit, what we're removing is magnesium sulfate,.

Magnesium sulfate is bath salts. You could furnish allthe spas in the world with the magnesium sulfatethat we're removing – Until finally. – And then we end up with ahigh purity lithium carbonate. (truck whizzing) – And up in Tamarack Minnesota. – If you zoom out, youcan see the intrusion. – Talon Metals hasbeen 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 million metric tonsof nickel mineralization sitting within the deposit. – So the deposit is quite special, it's not the largest inthe world by any means, but it is very high grade. This piece is aroundabout about 9% nickel. And when you move this around, basically anything that flashes.

Is the nickel mineralization. 1% is considered high grade, so 9%, we're 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. (laughs) – Two years after that call,.

Tesla committed topurchasing 75,000 metric tons of Talon's future product, Enough nickel for an estimated 1.2 million Tesla Model Y EVs. Taken together, Tamarack's nickel and Thacker Passes' lithium would mean billions in savingsfor 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 respect to electric vehicles, prices are just too high. – EV sales growth has nearly stalled out inthe US in the past year, that slowdown has weighedheavily on battery metal prices. Nickel is down 26% since early 2023. Lithium is down more than 80%, making mining projectsless economically viable.

– It means that projectsare being delayed, it means that some projectsare 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 impossibleto 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 NationalMining Association, – We've spent more than a decade getting to where we are today. – The Tamarack depositwas discovered in 2008. – Mining projects,including Thacker Pass and Tamarack, have also faced opposition from environmental and localNative American groups.

Talon Metals even moved a planned nickel processingfacility out of the state. – Now for some people, that's not gonna be enough, but at least we hope that people feel that we have been listening, and that we've taken actionto do something about it as we plan the mine. – Talon hopes todeliver nickel to Tesla in 2028.

Lithium Americas is now fully permitted and will start production in 2027. Still, it's going to takemore than these initial plans to create a reliabledomestic mineral supply. – We have found one deposit, but we're finding mineralization in these other areas as well. I can definitely see Tamarackgrowing in the future. – Our deposit is within an area.

That's the largest in the world, so expansion opportunitiesthere are quite good. (gentle music)

Sharing is caring!