Alliance Nickel (ASX:AXN) has executed a binding offtake and share subscription agreement with global automaker Stellantis (NYSE:STLA) to strengthen the value chain for electric vehicle battery production with material from the NiWest Nickel-Cobalt Project in Western Australia.
Under the offtake agreement, Alliance is expected to supply about 170,000 tonnes of nickel sulphate and 12,000t of cobalt sulphate over a 5-year period, with conditions precedent including successful start-up of commercial production, product qualification, and other clauses customary for an agreement of this nature.
This agreement accounts for about 40% of Alliance’s future annual forecast of nickel and cobalt sulphate production from the project over the initial 5-year term.
Meanwhile, Alliance says the share subscription agreement gives Stellantis the opportunity to acquire an 11.5% shareholding in Alliance, as well as the right to nominate 1 director to the Alliance board, following the subscription for $15 million in new equity at a price of $0.18 per share.
The company notes the placement is structured into 2 tranches, with the issue of and proceeds for the first tranche of 70.6 million shares set to be completed within the next 5 business days. Issue of the second tranche of about 12.73 million shares is subject to Australian Foreign Investment Review Board approval, which Stellantis currently expects to be received during the June quarter 2023.
Funding from this placement is expected to be applied towards the completion of the NiWest Definitive Feasibility Study (DFS) and engineering design works.
Alliance also notes the agreement also solidifies its partnership with Stellantis, which was inaugurated in October 2022 with a non-binding memorandum of understanding for the supply of electric vehicle battery materials, and ‘strongly’ supports the NiWest DFS, as well as future project funding and development.
Commenting on the agreement and investment, Alliance Nickel Chief Executive Officer (CEO) and Managing Director Paul Kopejtka says: “The Binding Agreements with Stellantis, one of the world’s leading and most forward-thinking vehicle manufacturers, are transformative for the future of Alliance. 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.
“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”
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.”
Also speaking on the partnership, Stellantis CEO Carlos Tavares says: “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.
“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 partnership with Alliance Nickel is an important element of our plan to provide clean, safe and affordable mobility for people throughout the world.”
Alliance Nickel is an ASX-listed nickel and critical minerals development company focused on becoming a supplier of battery-grade nickel and cobalt products. The company’s flagship asset is the NiWest Project located near Leonora in Western Australia, which contains one of the highest-grade undeveloped nickel laterite resources in Australia.
Stellantis represents one of the world’s leading automakers and mobility providers, with storied and iconic brands that embody the passion of its visionary founders and today’s customers in their innovative products and services, including Abarth, Alfa Romeo, Dodge, Chrysler, Fiat, Maserati, and Vauxhall.
Images: Alliance Nickel Ltd
