The Elements of Innovation Discovered
The Elements of Innovation Discovered
Metal Tech News - February 16, 2024
The offtake agreement with Nouveau Monde Graphite will provide GM with a supply of low-carbon graphite that is compliant with Inflation Reduction Act EV tax credit stipulations.
NMG CEO Eric Desaulniers and COO Bernard Perron in front of the first battery-electric Cat 793 mining truck at Caterpillar's Tucson Proving Ground.
General Motors and Panasonic Energy have entered into a deal with Canada-based Nouveau Monde Graphite (NMG) for a supply of low-carbon graphite anode material produced in North America for the lithium-ion batteries powering their electric vehicles.
As part of a larger deal that spurred a total of $87.5 million in new investment and sent NMG stock rocketing 20% higher, the automotive and battery manufacturing powerhouses have committed to offtake agreements for 85% of the anode material to be produced during Phase-2 production at Nouveau Monde's vertically integrated Matawinie graphite mine and Bécancour battery materials processing plant in Quebec.
To help finance the completion of development that will result in the targeted production of 43,000 metric tons of coated spherical graphite for the anodes of lithium-ion batteries, GM and Panasonic Energy are each making a $25 million equity investment in NMG. This funding by downstream buyers, coupled with the automotive and battery maker signing on as anchor customers for the anode material, rallied longtime NMG backers Mitsui & Co. and Pallinghurst Bond Limited to also invest an additional $25 million and $12.5 million, respectively, into the emerging graphite producer.
"Today, influential actors in strategic minerals, modern commodities, batteries, and EVs are coming together to drive the establishment of a Canadian source of graphite to support energy autonomy, national security, and global decarbonization," said Nouveau Monde Graphite Chair Arne H Frandsen. "I am confident that such commercial and investment levers will constitute the bedrock on which NMG can build its Phase 2 operations and more."
The more refers to a third phase of expansion that would come with the development of a mine at the company's recently purchased Uatnan graphite project, also in Quebec.
As the primary anode material, graphite is the single largest ingredient in lithium-ion batteries that power EVs, store renewable energy, and provide a growing number of electronic devices the freedom from being tethered to a power outlet.
Global analysts estimate that by 2030, it will take 5 to 6 million metric tons of graphite per year to fill lithium battery demands. This is nearly four times the 1.6 million metric tons mined globally for all uses during 2023, according to the U.S. Geological Survey.
Adding to the dilemma for automakers wanting to pass on the Inflation Reduction Act tax credits to American car buyers, China accounted for roughly 78% of the graphite mined and nearly 90% of the graphite anode material produced in 2023.
The IRA tax credits have restrictions on battery materials sourced from "foreign entities of concern," and Chinese companies are high on that list.
This makes the North American graphite anode material to be produced by NMG of high value to manufacturers of EVs and the batteries that go in them.
IRA tax credit eligibility, however, is not the only attribute that attracted GM and Panasonic Energy to tie up the majority of NMG's future anode material production. The active anode material produced by Nouveau Monde will also be carbon-neutral, a major ESG advantage for the manufacturers of EVs and batteries meant to slow global warming.
NMG CEO Eric Desaulniers and COO Bernard Perron in front of the first battery-electric Cat 793 mining truck at Caterpillar's Tucson Proving Ground.
NMG is working with Caterpillar to develop battery-electric mining equipment for the Matawinie mine, and both the mine and Bécancour battery materials plant will be plugged into the Hydro-Québec grid, which is fed 99% of its electricity from renewable energy sources.
"Clean energy is central to our operational, commercial, and ESG strategy," said Frandsen.
As a result, Benchmark Mineral Intelligence named Nouveau Monde as the world's top graphite company on its inaugural lithium-ion battery supply chain sustainability index published in December.
NMG will now begin passing those ESG credentials on to EVs made by GM and with Panasonic batteries manufactured in the U.S.
"In our journey to position NMG as the North American leader of responsible mining and advanced manufacturing, we had been looking for top-tier EV and battery manufacturers to bolster our commercial vision," said Nouveau Monde Graphite President and CEO Eric Desaulniers. "From the Matawinie ore, to the Bécancour active anode material, to our clients' U.S. battery factories, we are pioneering a resilient supply chain for the EV market."
With more than 16 years of covering mining, Shane is renowned for his insights and and in-depth analysis of mining, mineral exploration and technology metals.
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