The U.S. Department of Defense has awarded a grant exceeding $20 million to mine developer Talon Metals, which is actively exploring for nickel deposits in the geologically unique region spanning parts of Minnesota and Michigan’s Upper Peninsula. Nickel plays a crucial role in aerospace and electric vehicle battery manufacturing, with Talon committed to supplying automaker Tesla with 165 million pounds of nickel from its Tamarack mine, a joint venture with Rio Tinto under development in Minnesota.
Talon acquired exploration rights for nickel on 400,000 private acres in the Upper Peninsula last year and is seeking a lease from the Michigan Department of Natural Resources to conduct drilling on more than 23,000 public acres across several counties. A virtual public meeting on Talon’s proposed lease is scheduled for October 11.
Talon CEO Henri van Rooyen emphasized the importance of domestic nickel supply for national security, stating that the funding will accelerate efforts to discover domestic sources of battery-grade nickel and reduce dependency on foreign suppliers, particularly Russia, China, and Chinese companies operating in countries like Indonesia.
The grant, authorized under the Defense Production Act and funded through a congressional supplemental bill to aid Ukraine, will be used by Talon to acquire additional equipment and hire more employees. The company has committed to providing $21.7 million in matching funds on a cost-share basis over 39 months.
Anthony Di Stasio, a director in the undersecretary of defense for acquisition and sustainment office, stated that the award reflects the Department of Defense’s commitment to strengthening critical supply chains and reducing reliance on foreign sources for essential materials.
This grant follows a $114 million grant Talon received from the U.S. Department of Energy in 2022 to develop a nickel ore processing plant in Mercer County, North Dakota.
Talon is focusing its exploration efforts on the highly prospective Lake Superior region of Minnesota and Michigan, particularly near the nation’s only existing nickel mine, Lundin Mining Company’s Eagle Mine. The company is moving exploratory drilling rigs from Minnesota to Michigan as it advances through the permitting process for the Tamarack mine.
Talon’s initiatives align with the surging demand for electric vehicles, which is driving investments in domestic battery supply chains and fostering partnerships between EV manufacturers and mining companies like Talon for critical minerals.
In 2022, President Joe Biden designated five metals, including nickel, as essential to national security under the Defense Production Act due to their significance in battery technology.
Talon, headquartered in the British Virgin Islands, hired experienced geologist Dean Rossell, known for discovering both the Eagle and Tamarack deposits, to lead its exploration efforts.
It’s worth noting that if a mineable deposit is found in Michigan, it would undergo years of permitting and regulatory scrutiny, potentially facing opposition from groups concerned about environmental impacts, including sulfide acid drainage into groundwater and rivers.
In Minnesota, Talon is facing opposition from tribal and environmental groups who argue that the mine would endanger local waters. Such concerns have halted two other proposed nickel and copper mine projects in the state this year.