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European auto giant Stellantis backs Alliance Nickel to fuel its 2040 EV dreams with supply deal and premium $15m investment
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Alliance Nickel has pulled off a coup with one of the world’s largest carmakers cementing an investment and offtake deal to help get the company’s massive NiWest nickel and cobalt mine in Western Australia off the ground.
Investors sent Alliance Nickel (ASX:AXN) stock flying on the news, closing 26% higher at $0.12 yesterday but still well shy of the $0.18 a share Stellantis put on its investment into the budding battery metal producer.
Stellantis is the producer of the Peugeot, Chrysler, Alfa Romeo, Jeep, Dodge and Fiat car brands and more, explaining its eagerness to enter into a binding offtake agreement to take 40% of its nickel and cobalt sulphate production over the first five years from NiWest.
The car manufacturer has spent $15 million building an 11.5% shareholding in Alliance which also gives it the right to nominate a director to the AXN board.
Alliance managing director Paul Kopejtka said the order for 170,000t of nickel sulphate and 12,000t of cobalt sulphate over a five-year period was transformative for the NiWest project and Alliance’s future.
“It validates our development strategy for the NiWest Nickel-Cobalt Project and opens critical new funding options by securing a premier Tier 1 cornerstone customer and investor,” he said.
“We look forward to a long partnership with Stellantis as we continue to execute our strategy to become the next Australian supplier to the global markets of premium battery-grade nickel and cobalt sulphate.
“This is truly a ‘We Win Together’ outcome for both companies.”
Industry leading decarbonisation drive
The partnership with Alliance shows the role the NiWest project could play in what Stellantis CEO Carlos Tavares says is an ‘industry-leading decarbonisation drive’ at the Euro-American OEM.
“The commitments of Dare Forward 2030 and our industry-leading decarbonisation drive are built on the foundation of a guaranteed supply of key materials for our battery electric vehicles,” Tavares said.
“The partnership with Alliance Nickel is an important element of our plan to provide clean, safe and affordable mobility for people throughout the world.”
The agreement, built off a non-binding MoU initially entered into in October last year, follows technical, corporate and sustainability due diligence by Stellantis, which included an evaluation of NiWest’s proposed heap leach development and its potential greenhouse gas emissions.
Prices will be linked to index pricing on a take-or-pay basis.
The first 70 million share tranche of Stellantis’ investment in Alliance is expected to be complete in five business days with a second tranche of 12.73m shares requiring Foreign Investment Review Board approval, something expected in the June quarter.
Located near the Murrin Murrin nickel and cobalt mine in WA’s northern Goldfields, an update of the NiWest project PFS in July anticipated the mine would produce 456,000t of nickel in nickel sulphate and 31,400t of cobalt in cobalt sulphate over its 27-year life.
Annual production is expected to average 19,200t of nickel and 1400t of cobalt over its first 15 years, making the mine one of the largest in both EV metals in Australia.
This article was developed in collaboration with Alliance Nickel, a Stockhead advertiser at the time of publishing.
This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.
