Nickel ore processing plant that will supply Tesla strikes deal to spend $115M in federal funds

BISMARCK, N.D. (AP) — Developers of a proposed nickel ore processing plant in North Dakota that would supply electric automaker Tesla have reached a deal with the U.S. Department of Energy on how to spend nearly $115 million the federal agency awarded the project last year.

The recent agreement was the result of over a year of negotiations to determine how the money would be doled out to Talon Metals, the Bismarck Tribune reported Friday.

The Biden administration has backed the North Dakota facility as part of a national effort to bolster domestic production of critical minerals. It would process ore from Talon’s proposed underground mine near Tamarack in northeastern Minnesota. That project still requires approval from Minnesota regulators. It’s at the early stages of its environmental review, a process that could take at least a few years.

The federal funding will be made available at various stages, including once the company receives the necessary permits to build and operate the processing plant in Mercer County, Todd Malan, chief external affairs officer and head of climate strategy at Talon, told the Tribune. The company already has been able to access some of the funds for planning, permitting and site work, he said.

Talon plans to site the processing plant in a relatively dry part of North Dakota to reduce land disturbances and possible water pollution near the proposed mine. The decision also simplifies the complicated permitting process in Minnesota.

“We understand that in trying to produce nickel for national security and battery supply chain reasons people don’t want to see us hurt the environment either; our big thing is we don’t think it’s a choice,” Malan told the newspaper. “We think we can do both, and create good union jobs in North Dakota and Minnesota, but we certainly have alternative sources of supply if the permitting process in Minnesota takes longer than we anticipate.”

The mine has already encountered opposition from environmental groups and tribes worried about impacts on water and other resources such as wild rice. The sulfide-bearing ore can release harmful pollutants including sulfuric acid and heavy metals when exposed to water and air.

Talon Metals is a joint venture with the Anglo-Australian company Rio Tinto, the world’s second-largest metals and mining corporation, which has long been criticized by environmental and Indigenous groups around the world.

Two other Minnesota mining proposals have encountered stiff resistance for similar reasons. The proposed NewRange mine, formerly known as PolyMet, remains delayed by legal and regulatory setbacks. And President Joe Biden’s administration has tried to kill outright the proposed Twin Metals mine because of its proximity to the Boundary Waters Canoe Area Wilderness.