Recent Battery Deals May Show Manufacturers Can Handle the Task Congress Assigned To Them

People were wary of the most recent iteration of US electric vehicle subsidies in large part because it wouldn’t finance automakers who depend on China for minerals used in batteries.

Some said that if we only used battery components from friendly nations, EV adoption would be slower or PHEV sales would increase. It would be challenging, but not impossible, to achieve the requirements if we needed a sizable battery for an electric vehicle. Instead, automakers may simply decide to install tiny $1,000 or $2,000 batteries into vehicles and save a whopping $7,500.

Others pointed out that because EVs use rare minerals, many of which are controlled by China, the future of EVs is dubious. Beijing now has tremendous influence over both the electric vehicle sector and the stability of the global economy. For instance, we are all too familiar with the effects of a disruption in the oil market, as oil is a resource that is pumped and refined in numerous nations. But a much bigger issue arises when China has complete control over battery-grade synthetic graphite, 73% of cobalt, 68% of nickel, and 59% of lithium.

However, a recent statement from GM and another recent item we published demonstrate that manufacturers are taking potential supplies from friendly nations seriously, which may prove the doubters wrong.

After investing in Queensland Pacific Metals of Australia, GM has discovered a new, reasonably priced supplier of nickel and cobalt for Ultium battery cells. A patented method will be used to process the nickel laterite ore, reducing waste without the need for a tailings dam. According to the terms of the agreement, GM would contribute up to $69 million to Queensland Pacific Metals for the construction of its Townsville Energy Chemicals Hub (TECH) Project in Northern Australia.

A variety of GM trucks, SUVs, vans, and luxury cars, including the Cadillac LYRIQ, Chevrolet Silverado EV, GMC HUMMER EV Pickup and SUV, Chevrolet Blazer EV, and Chevrolet Equinox EV, will be powered in part by nickel and cobalt from Queensland Pacific Metals. The latter one is particularly significant because it plays a significant role in GM’s plan to offer reasonably priced EVs in an effort to overtake Tesla.

According to Jeff Morrison, vice president of global purchasing and supply chain at GM, “the partnership with Queensland Pacific Metals will give GM a secure, economically viable, and long-term supply of nickel and cobalt from a free-trade agreement partner to help support our rapidly expanding EV production needs.” Importantly, the agreement reflects our dedication to developing trusting relationships with our suppliers and is consistent with our strategy for ethical sourcing and supply chain management.

If everything goes as planned, Queensland Pacific Metals’ projected TECH Project will rank among the top producers of premium battery components. The business is building a refinery that can generate significant amounts of pure nickel and cobalt, two elements necessary for the batteries used in electric vehicles.

Stephen Grocott, CEO of Queensland Pacific Metals, said, “We are ecstatic to work with General Motors. “Queensland Pacific Metals and our TECH Project are a wonderful match for GM’s strategic vision, corporate values, and attention on sustainability in its drive of manufacturing electric vehicles for everyone. With GM’s investment in our business and the related offtake, we are one step closer to completing the TECH Project and delivering the nickel and cobalt that will one day be the cleanest produced in the world. We appreciate GM’s support of our TECH Project and look forward to joining the GM supply chain for sustainably derived raw materials.

High-grade nickel laterite ore from New Caledonia will be imported by Queensland Pacific Metals for processing at the TECH facility using a patented refining and recycling procedure known as the DNi Process. Nickel, cobalt, and other precious metals are extracted from laterite utilizing this technology’s environmentally friendly processes without harming the environment.

The DNi Process from Altilium Group, which boasts a greater than 98% nitric acid recycling rate and no tailings dam needs, is now licensed for use by Queensland Pacific Metals. Additionally, it generates less trash overall than conventional extraction methods. Everything is expected to begin in 2023.

The target of GM is to produce 1 million battery units annually in North America by the end of 2025, according to Morrison. “GM already has definitive agreements securing all battery raw material,” he added. As we work to guarantee supply through the end of the decade and support the growth of the EV industry, our new collaboration expands on those promises.

NOT JUST GM IS SEARCHING IN AUSTRALIA FOR BATTERY MINERALS Stellantis is traveling to Australia to gain access to battery materials that would be eligible for U.S. rebates and tax credits and improve geopolitical stability, as we noted in another recent piece.

In Western Australia’s NiWest Nickel-Cobalt Project, Stellantis and GME Resources Limited have signed a legally binding deal to supply quantities of battery-grade nickel and cobalt sulphate products.

A nickel-cobalt development project called NiWest will generate about 90,000 tpa of battery-grade nickel and cobalt sulphate for the rapidly expanding electric car industry. Drilling, metallurgical testing, and development studies have already cost more than AU$30 million. One potential location for NiWest’s processing facility is around 30 kilometers away from the Glencore-owned Murrin Murrin project, which is currently one of Australia’s biggest nickel-cobalt mines.

They have agreements with other suppliers as well. A sizeable supply of low-carbon lithium hydroxide has also been acquired by Stellantis from Controlled Thermal Resources and Vulcan Energy, located in North America and Europe, respectively. It is obvious that they value having access to supplies that are eligible for tax credits.

ARE THESE ACTIONS CAPABLE OF MAKING THE TAX CREDITS WORKABLE FOR BEVS? These agreements are insufficient on their own to allow American manufacturers to produce all the BEVs required to stop our reliance on China and make the most of the tax credit in the future. However, it demonstrates the struggle automakers are having to find compliant suppliers, and with more agreements similar to this, they may be able to make up the gaps.

Hopefully mining businesses and automakers continue in this direction and enable the sale of enough EVs at prices that everyone can afford after tax rebates.
GM provided the featured image.

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