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Vale confirms long-term supply deal with Tesla for Class 1 Nickel

An underground electric vehicle at Vale' Canadian mining operations. Source: Vale

Brazilian mining giant Vale has confirmed that it has signed a long-term contract with Tesla Inc to supply low-carbon, Class 1 nickel in the United States from its operations in Canada. The company went public with the deal after Tesla disclosed its direct suppliers in battery value chain in its 2021 Impact Report.

This agreement is in line with Vale's strategy to increase exposure to the electric vehicle industry, leveraging its low-carbon footprint and market-leading position as North America's largest producer of finished nickel, according to the company.

"We are pleased to have the leading electric vehicle manufacturer Tesla among our customers," said Deshnee 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's Canadian operations produce some of the lowest-carbon nickel globally. Rounds from its Long Harbour refinery in Newfoundland and Labrador in 2020 had a verified carbon footprint of 4.4 tonnes CO2 equivalent per tonne of nickel, while pellets and powder from the Copper Cliff Nickel Refinery in Ontario had a verified footprint of 7.3 tonnes equivalent.

This includes Scope 1 and 2 emissions from mining, milling and refining as well as upstream Scope 3 emissions from inputs, according to the mining company. Vale's target is to deliver 30 to 40 percent of Class 1 nickel sales into the fast-growing EV industry across the globe. 

Author : Dhiyanesh Ravichandran
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