Post by : Bianca
Haleem
Stellantis has dealt a significant setback to Australia’s battery materials industry by announcing the cancellation of its supply agreement with Alliance Nickel, effective December 3. This decision comes after Alliance failed to meet crucial milestone deadlines for the NiWest nickel and cobalt project located in Western Australia.
According to Alliance, the delays stem largely from challenging conditions in the global nickel market, which have hindered their ability to secure financing for new initiatives. Over the last two years, nickel prices have remained low, placing added pressure on producers and complicating funding for extensive projects.
Alliance Nickel also noted that declining commodity prices have negatively impacted its financial stability, prompting the company to postpone other commitments while attempting to gather sufficient funding for NiWest. This project had been central to Australia’s burgeoning role as a key supplier of essential materials for electric vehicle batteries.
Initially, Stellantis had agreed in 2023 to purchase 170,000 tons of nickel sulphate and 12,000 tons of cobalt sulphate over a five-year period, which accounted for approximately 40% of NiWest’s expected annual production. Additionally, the deal included Stellantis acquiring an 11.5% stake in Alliance Nickel, marking its first large investment in Australian battery materials.
This termination represents Stellantis's second cutback on supply agreements with Australian companies recently, following the end of an agreement with battery materials supplier Novonix due to unresolved product specifications.
Following the news, shares of Alliance Nickel fell sharply, down as much as 6.4% in early trading. Industry experts suggest that while this is a significant setback for the miner, it may also create opportunities to renegotiate terms that align more effectively with the updated project timelines and market conditions.
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