Stellantis (NYSE: STLA) continues to secure raw materials for its electric vehicle supply chain. The latest arrangement has seen the company secure nickel and cobalt sulphate from Alliance Nickel (ASX: AXN) via a binding offtake agreement.
The binding offtake agreement stipulates that Alliance Nickel will supply 170,000 tons of nickel sulphate and 12,000 tons of cobalt sulphate over a five year period from its NiWest project in Western Australia. The figure represents an estimated 40% of annual production from the mine.
The NiWest mine is currently undergoing a feasibility study, which is currently slated to be completed later this year. A pre-feasibility study that was updated in July 2022 meanwhile outlined a 27 year initial life of mine, with 19,200 tonnes per annum of average nickel production and 1,400 tonnes per annum of cobalt production.
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Pricing for the metals meanwhile is to be linked to index prices.
The offtake arrangement follows a memorandum of understanding entered between the two firms back in early October, which at the time was for a future offtake agreement.
As part of the arrangement, Stellantis is to also invest €9.2 million into Alliance Nickel, which will provide them with an 11.5% interest in the mining firm, as well as the right to nominate one director to Alliance’s board.
The arrangement follows Stellantis entering a similar transaction with McEwen Copper earlier this year, whereby they are investing $155 million to secure future production from the Argentinian miner.
The company is currently focused on achieving a 100% electric vehicle sales mix in Europe and a 50% electric vehicles sales mix in the United States by 2030.
Stellantis last traded at $16.42 on the NYSE.
Information for this briefing was found via the companies mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
