Vale (NYSE: VALE) has struck a multi-year agreement to supply Swedish lithium-ion battery manufacturer Northvolt AB with low-carbon nickel from its Long Harbour refinery in Newfoundland.
Details regarding volume and pricing were not released, but the multinational base metals miner said that the agreement had been two years in the making and would serve as a "launchpad for further cooperation."
"This supply agreement is another strategic milestone as we pivot our business towards electric vehicle demand," said Deshnee Naidoo, Vale's executive vice-president of Base Metals. "We're excited to build a lasting relationship with Northvolt that raises the bar on sustainably sourced raw materials for this fast-growing sector."
The agreement comes as electric vehicle manufacturers look to not only secure nickel amidst supply constraints - but to supply nickel that's produced at as low a carbon intensity as possible, in alignment with EVs being a key part of the fight against climate change.
The deal fits with Northvolt's plans reduce carbon emissions associated with batteries by up to 90%, mainly through leveraging clean energy in production and recycling.
It comes on the heels of several nickel supply agreements EV automaker Tesla has recently signed with Prony Metals, which bought Vale's interest in its Goro nickel mine in New Caledonia; BHP; and in a first for supply from North America, Talon Metals (TSX: TLO; US-OTC: TLOFF) , which has a 51% stake in the earlier stage but high-grade Tamarack project in Minnesota.
In November, Vale announced that Intertek Group Plc, a leading assurance, inspection, product testing and certification company, had lent independent third-party limited assurance to the carbon footprint of nickel rounds produced at Long Harbour.
While Vale's Canadian operations are already low-carbon - the company says rounds from Long Harbour have a verified carbon footprint of 4.4 tonnes CO2 equivalent per tonne of nickel, which is about one-third the average for Class 1 nickel - Vale plans to further cut emissions. As part of its plans to reach net zero by 2050, the company is investing between US$4 and US$6 billion to cut absolute carbon emissions 33% by 2030.
Vale produces roughly 65,000 tonnes of nickel annually from its operations in Sudbury, Ont. Production from its Voisey's Bay mine in Newfoundland, which transitioned to underground mining from open pit last year, will rise as high as 40,000 tonnes nickel in concentrate annually.