Vale inks nickel deal with GM that could be worth $760M a year

Industry giant Vale (NYSE: VALE) has landed its first large-scale electric vehicle battery deal in North America, supplying nickel to power a slew of General Motors’ cars and trucks, the companies said on Thursday.

The deal for 25,000 tonnes per year of nickel works out to about $762 million per year using a September average metal spot price of about $30,500 per tonne, though both companies declined to state the agreement’s dollar value in a joint news release. They called it a long-term deal, but didn’t say how many years. 

The nickel is to come from Vale’s proposed plant at Bécancour near Trois-Rivières, Que., a first-of-its-kind facility for Canada and North America, Vale said. It will wind up in electric vehicles such as the Chevrolet Silverado EV, the Cadillac LYRIQ and the GMC HUMMER EV pickup. The supply will outfit about 350,000 electric vehicles per year, the companies said. Nickel deliveries are planned to start in the second half of 2026.

“The proposed nickel sulphate project would utilize high purity, low-carbon nickel from our Canadian refineries and is a natural extension for the business,” Deshnee Naidoo, Vale executive vice president of base metals, said in the release. The deal offers a “fast entry and anchor point into the North American electric vehicle market,” he said. 

Brazil-based Vale, the world’s largest iron ore and nickel producer with mines in Sudbury, Ont. and Voisey’s Bay, N.L. among others, is among miners poised to benefit as manufacturers ramp up green energy technology for nations to fight climate change. Demand for battery minerals such as nickel, lithium and manganese is forecast to explode. Companies such as GM and Tesla are racing to secure supplies. 

Nickel sulphate is a chemical compound used in the production of cathodes in nickel-based lithium-ion batteries.

Including this deal, GM has contracted enough battery raw materials to build 1 million electric vehicles per year, Doug Parks, a GM executive vice president in global product development, said in the release. 

GM “is strictly focused on building a secure, sustainable, scalable and cost-competitive EV supply chain,” Parks said. “The material sourced from Vale will help support EV eligibility for consumer incentives under the new clean energy tax credits in the U.S.”

The law approving those EV tax breaks which the Biden administration signed in August also included funding to help the U.S., Canada and other allies develop critical mineral projects to rival Chinese control of the market. The U.S. Department of Defense has revived a program with distant roots in World War II that now has US$750 million in funding, including for projects in Canada. 

François-Philippe Champagne, federal Minister of Innovation, Science and Industry, said resource-rich Canada can be the supplier of choice for electric vehicles. 

“By leveraging Canadian critical minerals, we will see more jobs for Canadians, a growing economy and a greener and cleaner future for everyone,” Champagne said in the release. It also included Pierre Fitzgibbon, Québec’s Minister of Economy, Innovation and Energy, who said the province has “the resources and the expertise to produce the cleanest battery in the world.”

Vale and GM also agreed to partner on advancing metal recycling technology.