U.S. automaker General Motors Co. GM-N and Japan’s Panasonic Holdings Corp. PCRFY will buy electric-vehicle battery materials from Nouveau Monde Graphite Inc. NOU-X and invest in the company, buoying the Quebec miner’s bid to become a go-to critical mineral supplier for North America.
GM and Panasonic have each committed to purchasing 18,000 metric tonnes of graphite for battery anodes annually, beginning when Nouveau Monde’s planned mining and refining facilities enter production, the company said in news releases Thursday. The offtake agreements will run for six to seven years, and they represent about 85 per cent of Nouveau Monde’s planned commercial production, which it is aiming to begin in 2027.
The industrial giants have also agreed to make equity investments in Nouveau Monde NMG-N, starting with a US$25-million stake each. GM has pledged another US$125-million once the miner makes a final decision to proceed with its plans, and Panasonic has pledged $150-million if the same condition is fulfilled. Panasonic has said it would potentially make this investment alongside co-investors.
Two of the miner’s existing backers, Japanese trading house Mitsui & Co. and European private equity investor Pallinghurst Group, also announced Thursday that they are injecting a combined US$37.5-million of additional funding into the company.
“Today marks a huge milestone in our journey to establish NMG as a leading and sustainable graphite anode materials supplier in North America,” Nouveau Monde chief executive Eric Desaulniers said in a video on the company’s website. He added that Panasonic and GM are making a strong, long-term commitment to securing local, reliable and carbon-neutral supply chains for their businesses.
Western automakers and parts manufacturers have been working to make their electric-vehicle supply chains less reliant on China, which currently controls almost the entirety of the world’s supply of battery-grade graphite. This has triggered a reset of their global footprints as they scramble to secure minerals needed for battery production, forge alliances with new partners and plot new factories to feed their dealer showrooms.
It’s a once-in-a-lifetime shift fuelled by government backing on an unprecedented scale. Ontario and Quebec have both moved quickly to grab part of the action. In partnership with the federal government, they have used generous loans and subsidies to lure companies.
The Chinese government threw the industry into an uproar when it announced in December that it would tighten export controls on graphite and other strategic materials.
“It’s crazy,” Mr. Desaulniers said in an interview. He added that his team is fielding a wave of calls from big manufacturers. “They suddenly have a mandate from their board. Like, ‘Go find graphite.’”
Montreal-based Nouveau Monde is trying to become the biggest natural graphite producer for electric vehicles in North America. It recently bought Mason Resources Inc.’s graphite deposit in Lac Guéret, Que.
The company’s plan is to build a fully integrated supply process that will pull the mineral ore out of the ground at its Matawinie Mine, located about 120 kilometres north of Montreal, refine it at a battery material plant in Bécancour, an emerging battery hub, and ship it to customers.
Nouveau Monde estimates it will cost $1.5-billion to build its facilities. The company has said it plans to fund this by selling equity and borrowing. It added in its news releases on Thursday that the deals with Panasonic and GM offer potential lenders, strategic investors and governments greater certainty on the viability of the projects.
Graphite is key to making batteries for electric vehicles. More than 95 per cent of the anode side of these batteries is made from graphite, making it the most sought-after raw material of all battery metals, according to Benchmark Mineral Intelligence.
Under the terms of the agreements announced Thursday, Nouveau Monde and its anchor customers have not set a fixed price for the graphite to be produced in Quebec. Rather, the price will be based on a formula that takes into consideration various data points, Mr. Desaulniers said.
“We don’t want to displace China altogether,” he said. “We want to be a safe, clean and reliable alternative to what the Chinese suppliers are doing today. And we deserve a premium for that.”
Nicolas Van Praet