Talon Metals Corp shares have surged on news that its subsidiary was chosen to receive a $114 million grant from the US Department of Energy (DOE) as part of the Infrastructure, Investment and Jobs Act signed into law by President Biden last year.
Talon Nickel LLC has been selected as one of the first set of recipients of funding intended to expand domestic manufacturing of batteries for electric vehicles (EVs) and the electrical grid that are currently being imported from other countries.
Talon’s proposal is to build an ore processing and tailings management facility located at an existing industrial brownfields site in North Dakota. The facility would receive feedstock from the company's underground Tamarack mine in central Minnesota, among other potential sources in North America, the company said. The $114 million grant is estimated to be 27% of the total project cost.
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Shares of the company climbed 17% to C$0.58 in Toronto and nearly 20% to about US$0.43 in New York.
The preferred site in North Dakota is still actively under negotiations, but removing the processing facilities from their current Tamarack mine site in Minnesota significantly reduces land disturbance and the scope of environmental review and permitting, Talon noted.
Talon’s expectation is that the separation of mine and processing operations would create domestic battery grade nickel and iron production capable of fulfilling its previously announced agreement with Tesla Inc (NASDAQ:TSLA) to achieve commercial nickel production at Tamarack by 2026.
Prioritizing development of US battery supply chain
Additionally, the company noted that this would help it meet the goals established by the DOE’s 2021 National Blueprint for Lithium Batteries which calls for the US to “establish a secure battery materials and technology supply chain” by 2030.
"Between the Bipartisan Infrastructure Law and the Inflation Reduction Act, the United States has enacted significant measures in the last year that prioritize and accelerate the development of the domestic battery supply chain from mining through to recycling," CEO Henri van Rooyen said in a statement.
"This national urgency and the target date for nickel and iron production set within our Tesla-Talon Supply Agreement required an innovative approach to bring a new domestic source of battery minerals into production during a period of global battery-grade nickel deficits.”
Other stakeholders are similarly optimistic.
"We look forward to working with Talon to mine nickel in Minnesota and process it in North Dakota,” said Tom Conway, president of the United Steelworkers. “It's essential that we have a stable supply chain for the raw materials we'll need to power clean energy technology, and USW members have a long, proud history of standing up for safe, family-sustaining, union jobs in the area. Through workforce training and a strong collaboration, we'll ensure that the jobs created will put us on strong footing and continue to sustain our communities well into the future."
Stakeholders involved
Talon has expressed its commitment to working with unions, the local community and tribal governments to ensure the battery minerals processing facility has broad support, contributes to the local economy and protects the environment.
The company has already concluded a neutrality and workforce development agreement with the United Steelworkers union which applies nationally and is negotiating a project labor agreement with building trades unions in both Minnesota and North Dakota.
Contact Andrew Kessel at andrew.kessel@proactiveinvestors.com
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