Post by : Badri Ariffin

In a significant setback for Australia’s battery materials industry, Stellantis has confirmed the cancellation of its supply deal with Alliance Nickel, effective December 3. This move comes after Alliance failed to meet crucial project milestones for the NiWest nickel and cobalt initiative based in Western Australia.

The company attributed the delays to challenging global nickel market conditions, which have hindered financing efforts for new ventures. Over the past two years, nickel prices have remained low, putting additional strain on producers and complicating the funding of extensive projects.

Alliance Nickel noted that the recent drop in commodity prices has adversely impacted its financial status, leading it to defer other commitments while it seeks appropriate funding for the NiWest project. This initiative had previously stood as a vital component of Australia's expanding role in supplying essential battery materials for electric vehicles.

The initial agreement established in 2023 involved Stellantis pledging to buy 170,000 tons of nickel sulphate and 12,000 tons of cobalt sulphate over five years, which represented around 40% of NiWest’s anticipated annual production. Additionally, it included Stellantis acquiring an 11.5% stake in Alliance Nickel, marking the automaker's significant entry into the Australian battery materials market.

This cancellation marks Stellantis's second supply agreement termination with an Australian firm recently, following a similar end to its partnership with Novonix due to ongoing product specification issues.

Following the announcement, Alliance Nickel’s shares dropped dramatically, falling by 6.4% in early trading. Analysts indicate that while this poses challenges for the miner, it may also pave the way for renegotiation on terms that would align better with updated project timelines and market conditions.

#Global News #Tech News