The maker of Jeep SUVs, Ram pickup trucks and other vehicles on Friday announced it has signed a binding offtake agreement and investment deal for nickel and cobalt sulphates, key minerals for use in electric-vehicle batteries.
The contract, which is subject to regulatory approvals, will solidify a non-binding memorandum of understanding made in October with Alliance Nickel Ltd. The new agreement is for an initial five-year period and includes a supply of 170,000 tons of nickel sulphate and 12,000 tons of cobalt sulphate. That represents about 40% of the forecasted annual production of the NiWest Nickel-Cobalt Project in Western Australia.
Stellantis’ payments will be linked to index prices for the minerals. It also is paying $10.1 million (9.2 million euro / 15 million Australian dollars) for an 11.5% share of Alliance Nickel.
Stellantis is investing $35.5 billion into electrification and software by 2025 with dozens of all-electric vehicle launches slated between now and 2030, including 25 for the U.S. market. The agreement with Alliance is the latest in a string of deals with mineral suppliers as executives raise concerns over the supply and cost of necessary materials for EV batteries.
“The commitments of Dare Forward 2030 and our industry-leading decarbonization drive are built on the foundation of a guaranteed supply of key materials for our battery electric vehicles,” Stellantis CEO Carlos Tavares said in a statement. “The partnership with Alliance Nickel is an important element of our plan to provide clean, safe and affordable mobility for people throughout the world.”
Funds from the equity purchase will help to complete the feasibility study and enfineering design works for the NiWest project. Those are expected in the last quarter of 2023.
“The binding agreements with Stellantis, one of the world’s leading and most forward-thinking vehicle manufacturers, are transformative for the future of Alliance,” Paul Kopejtka, Alliance’s managing director and CEO, said in a statement. “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.”