Stellantis Terminates Nickel Supply Agreement with Alliance Nickel

Post by : Bianca Suleiman

In a significant setback for Australia’s battery materials industry, Stellantis has informed that it will end its supply agreement with Alliance Nickel, effective December 3. This decision follows Alliance Nickel's failure to meet crucial milestone deadlines for the NiWest nickel and cobalt initiative in Western Australia.

According to Alliance Nickel, the delays stemmed largely from challenging conditions in the global nickel market, which have hampered financing opportunities for new developments. Over the past two years, stagnant nickel prices have exerted pressure on producers, complicating the funding of larger operational projects.

The miner indicated that declining commodity prices have adversely impacted its financial health, necessitating the deferral of other obligations while it seeks sufficient funding for NiWest. This project was projected to play a vital role in positioning Australia as a significant supplier of essential battery materials for electric vehicles.

The initial agreement in 2023 involved Stellantis planning to acquire 170,000 tons of nickel sulphate and 12,000 tons of cobalt sulphate over a five-year term, constituting nearly 40% of NiWest’s anticipated annual output. Additionally, Stellantis was slated to gain an 11.5% equity stake in Alliance Nickel, marking its first major foray into Australian battery materials.

This cancellation marks the second supply agreement Stellantis has rescinded with Australian firms in recent days, following the dissolution of its deal with Novonix, a battery materials provider, due to ongoing issues with product specifications.

In response, Alliance Nickel’s shares witnessed a notable decline, plummeting by as much as 6.4% during early trading hours. Market analysts note that while this represents a blow to the miner, it also paves the way for potential renegotiation of terms to better match updated project timelines and market conditions.