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.
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.
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