PARIS (Reuters) -Carmaker Stellantis has signed a non-binding preliminary agreement with GME Resources to secure supplies of nickel and cobalt sulphate for electric vehicle (EV) batteries, the two companies said on Monday.
The deal marks a further move by the world’s fourth largest carmaker to lock down supplies of metals needed for batteries that power EV cars, ahead of an expected surge in global demand as a transition towards cleaner mobility gains traction.
Earlier this year the Franco-Italian group signed a lithium supply agreement with developer Vulcan Energy Resources and said it would invest 50 million euros ($48.6 million)to buy an 8% stake in it.
Stellantis and the GME mining company said in a statement on Monday that the memorandum “represents the first step toward a potential long-term partnership,”.
Financial details were not disclosed.
The supply will come from a nickel and cobalt advanced mining project in Western Australia called “NiWest”, which GME is currently developing, with a planned production of around 90,000 tonnes per year of battery-grade nickel and cobalt sulphate.
A feasibility study for NiWest is due to start this month, the companies said.
Stellantis Chief Purchasing and Supply Chain Officer Maxime Picat said that securing the raw material sources and battery supply would strengthen the group’s value chain for EV production and support its decarbonisation target.
Stellantis, the owner of brands including Jeep, Peugeot, Fiat, Citroen, Maserati and Opel, has pledged to make up 100% of its sales in Europe and 50% of its sales in the U.S. from battery electric vehicles by 2030.
($1 = 1.0286 euros)
(Reporting by Tassilo Hummel in Paris and Giulio Piovaccari in Milan;Editing by Sudip Kar-Gupta and Louise Heavens)