Stellantis is ending its binding offtake agreement with Alliance Nickel for nickel and cobalt sourced from the NiWest project in Western Australia, citing unmet project requirements. The termination will officially take effect on December 3.
Alliance attributed the contract termination to certain missed deadlines, which rendered the current agreement ‘inoperative.’
The company stated that the missed requirements were mainly due to weak nickel market conditions and the subsequent challenges in obtaining project funding.
Despite the contract termination, Alliance noted that Stellantis is still interested in the NiWest Project and has expressed openness to renegotiating offtake terms that align more closely with the updated project timeline and current market conditions.
The company pointed to the prolonged downturn in nickel prices over the past two years, noting that this decline has limited access to funding for new nickel projects globally.
As a result, it has had to postpone project development while pursuing appropriate financing options designed to maximize shareholder value.
Additionally, the company said it is exploring strategic alternatives, including the possibility of a special purpose acquisition company (SPAC) deal that could lead to a Nasdaq listing.
In 2023, Stellantis and Alliance signed a supply agreement for the delivery of 170,000 tons of nickel sulphate and 12,000 tons of cobalt sulphate over an initial five-year period. This volume represented about 40% of the NiWest project’s projected yearly production.
As part of the deal, Stellantis also invested €9.2 million in equity to acquire an 11.5% ownership stake in Alliance Nickel.
Earlier this week, FCA U.S., a subsidiary of Stellantis terminated its offtake agreement with Novonix due to disagreements over battery cell product specifications and the criteria for mass-production qualification.
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