Alliance Nickel (ASX:AXN) signs nickel-cobalt offtake term sheet with Samsung SDI
February 8, 2024Alliance Nickel has signed a non-binding term sheet with Samsung SDI for future offtake of battery-grade nickel and cobalt sulfate products from its NiWest project in Western Australia, receiving a hefty share price bump in early trading.
The term sheet includes that Alliance and the global lithium-ion leader will discuss a potential acquisition of an equity interest in a new project company created to hold NiWest.
NiWest is a well-advanced nickel-cobalt development with a proposed processing facility within 30 kilometres of the largest operation of its kind in the nation.
Alliance Managing Director and CEO Paul Kopejtka said the company was delighted to introduce Samsung SDI as a potential long-term strategic partner, particularly given the challenging market conditions facing the critical minerals sector.
“The term sheet is further validation of the credentials of the NiWest project, its strategic significance to tier-one automakers and battery manufacturers, and the importance of the supply of specialty materials that comply with the US Inflation Reduction Act,” Mr Kopejtka said.
“Samsung SDI has an existing business relationship with our strategic partner and cornerstone investor, Stellantis N.V. and we look forward to building a strong partnership as we move towards first production from NiWest.”
The Alliance share price ascended by over 60 per cent in early trading, a bright spot for a nickel-focused stock as industry powerbrokers debate on how to keep Australian industry churning amid a glut of cheap Indonesian supply.
An updated 2022 pre-feasibility study showed robust economics, but Alliance has put a definitive study on hold, instead moving forward on an updated resource estimate to update ore-reserve tonnages ahead of the study.
But there is still evident interest in one of Australia’s largest and highest-grade undeveloped nickel-cobalt deposits despite depressed prices, with tax credits and royalty reliefs potentially on the cards from both the federal and Western Australian governments.
Indonesian President Joko Widodo has even previously suggested market-disrupting plans to create an OPEC-style nickel cartel for controlling reserves and prices as the nation continues to cement its place as the world’s largest producer.
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