Voisey's Bay nickel could end up in electric vehicles from companies like BMW and Tesla under new deals

Nickel mined at Voisey's Bay in Labrador could end up in batteries for electric vehicles from companies like Volkswagen, BMW and Tesla under new supply agreements.

Last week, Vale Canada, the company that operates Voisey's Bay, announced plans to supply nickel to Northvolt AB, a Swedish battery manufacturer.

"This is the first public large commercial sales agreement of high-grade nickel between a North American miner and the largest integrated battery maker in Europe. It shows very clearly a shared commitment to sustainability in the electric vehicle value chain," said Vale in a statement to CBC News.

The agreement, which Valesays has been in the works for two years, comes after the company confirmed last fall that it was in talks with battery manufacturers to provide material for electric vehicles. According to Vale, about five per cent of its production already goes to electric vehicles, and it plans to increase its production share to 30 to 40 per cent.

Northvolt specializes in lithium-ion battery technology, and has agreements with Volvo, BMW and Volkswagen, among other companies. The company also provides batteries for electric mining equipment.

Vale would not reveal how much the deal is worth, when it will begin or how much nickel could go to Northvolt.

On Wednesday, Bloomberg reported that Vale has also signed a multi-year deal to supply nickel to electric vehicle company Tesla. In response to a request from CBC News, a spokesperson for Vale said the company had no comment.

In addition to Voisey's Bay, Vale also operates nickel mines in Manitoba and Ontario. While it isn't clear if nickel mined at Voisey's Bay will be supplied to Tesla, a spokesperson confirmed nickel from the Labrador mine is part of the agreement with Northvolt.

More opportunity for critical mineral development: Mining Industry N.L.

Ed Moriarity, executive director of the non-profit business association Mining Industry N.L., saidthe agreement is a positive sign for the province's mining sector as renewable energy and electric vehicle markets heat up around the world.

"I see substantial opportunity for Newfoundland and Labrador to lead the country in critical minerals development," he said "We have the expertise, experience, know-how and the resource base to realize this over the long term."

According to the Mining Association of Canada, "critical minerals" are metals and non-metals considered vital in aerospace, defence, telecommunications, computing and technologies like solar panels and electric car batteries. Moriarity said Newfoundland and Labrador has supply and exploration opportunities involving several of those minerals, like cobalt, copper and nickel.

According to Moriarity, Newfoundland and Labrador is the fifth-largest producer of minerals and metals in the country, and employs 7,000 to 8,000 people.

"Given the way the world is moving our role and place in that new energy infrastructure, development will be even more assured," he said.

N.L. mining industry could be part of energy transition: industry minister

According to Vale, nickel processed at its Long Harbour refinery has a carbon footprint of 4.4 tonnes CO2 equivalent per tonne of nickel, about one-third the industry average.

"This partnership reflects our strengths as a sustainable, reliable and low-carbon supplier of high-grade nickel to a top battery materials and cell producer that is integrated with some of Europe's largest car makers," said Vale.

Industry Minister Andrew Parsons said the province's mining industry is well-positioned to supply products needed for transitioning to renewable energy.

"This low-carbon footprint nickel that we have here is a demonstration, you know, full demonstration, that we have low carbon products here that are extremely necessary for the green economy."

Parsons said the government is working to attract more investors and facilitate exploration in the mining industry.

"Our job is to get out there and sell," he said. "We are representing the department and our province."

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