Alliance Nickel and Samsung SDI sign a non-binding term sheet for future offtake of battery-grade nickel and cobalt sulphate products from the NiWest Nickel-Cobalt Project, and will discuss a potential acquisition by Samsung SDI of an equity interest in the project
Samsung SDI to offtake battery-grade nickel and cobalt products from the NiWest project. (Credit: CHUTTERSNAP on Unsplash)
Alliance Nickel has signed a non-binding term sheet with South Korea-based battery materials manufacturer Samsung SDI for the future offtake of battery-grade nickel and cobalt sulphate products from the NiWest nickel-cobalt project in Western Australia.
Under the term sheet, Samsung SDI will sign a binding offtake agreement for an initial period of six years, subject to final negotiations of the definitive terms and conditions.
Also, Samsung SDI and Alliance Nickel will discuss on potential acquisition by Samsung SDI, an equity interest in a project company to be formed by Alliance Nickel that will hold the NiWest Project.
This approach is consistent with Alliance Nickel’s commercial strategy of aligning offtake agreements and project funding, to the extent commercially feasible and acceptable to the counterparty.
Alliance managing director and CEO Paul Kopejtka said: “We are delighted to introduce Samsung SDI as a new potential long-term strategic partner in the NiWest Project, particularly given the current challenging market conditions facing the critical minerals sector.
“The term sheet is further validation of the credentials of the NiWest Project, its strategic significance to Tier-one automakers and battery manufacturers and the importance of the supply of speciality materials that comply with the US Inflation Reduction Act.
“Samsung SDI has an existing business relationship with our strategic partner and cornerstone investor, Negotiation and execution of the detailed definitive agreement is subject to due diligence and customary closing conditions, including respective company approvals.”
NiWest is an advanced nickel-cobalt development project located around 55km east of Leonora in the northeastern Goldfields region of Western Australia.
The project is expected to produce around 100,000tpa of battery-grade nickel and cobalt sulphate products for the electric vehicle market.
NiWest will have a processing facility proposed to be built within 30km of Glencore’s Murrin Murrin operation, the largest nickel-cobalt operation in Australia.
A definitive feasibility study (DFS) for NiWest is underway and is expected to be completed in mid-2024.
In May last year, Alliance Nickel signed an agreement with Dutch automotive manufacturer Stellantis to offtake battery-grade nickel and cobalt sulphate from the NiWest project.
Alliance Nickel has agreed to supply 170,000 tons of nickel sulphate and 12,000 tons of cobalt sulphate in total over an initial five-year period.
In addition to the offtake, Stellantis has agreed to buy new equity in Alliance Nickel, worth €9.2m, in exchange for an 11.5% shareholding upon completion.