GM joins rush of US car manufacturers to lock in battery metals with $32m stake in Queensland Pacific Metals
GM has extended the recent rush from US car giants to secure battery metals from Australian miners, punting on an equity stake in Queensland Pacific Metals.
US automotive giant General Motors has joined Ford and Tesla in the rush to lock in battery metal supply deals with Australian producers, taking a stake in Queensland Pacific Metals.
Shares in the nickel hopeful jumped on Wednesday after GM announced it would sink an initial $US20.1m ($32m) to take a stake at 18c – a 20 per cent premium to the last closing price – in exchange for a guarantee of nickel and cobalt supplied from a proposed Townsville plant.
GM could invest up to $US69m in QPM, with further cash likely to flow when the company delivers a definitive feasibility study on its Townsville Energy Chemicals Hub project before the end of the year.
It is the second deal this week signed to secure supply from Australian nickel and cobalt projects from a major end-user, after European carmaker Stellantis – which owns brands such as Fiat, Jeep, Maserati and Alfa Romeo – cut a deal with explorer GME Resources for supply from its West Australian project.
The deals come amid a growing scramble from end users to secure supplies of lithium, nickel, cobalt and other battery-making materials amid growing expectations the manufacturing sector could struggle to deliver on aggressive electric vehicle growth plans amid a shortfall in the development of resources needed to make batteries.
The scramble is particularly acute for US manufacturers, who risk missing out on $US7500 electric vehicle tax credits on offer from the administration of US President Joe Biden if they do not source the critical minerals for their batteries either from within the US, or from countries with a free-trade agreement with the US – such as Australia.
GM already has a supply deal with Glencore’s Murrin Murrin nickel and cobalt mine in WA.
GM and Stellantis join fellow automotive giants Ford, Tesla, BMW and other automotive giants in locking in supply deals with Australian miners ahead of a looming crunch in the market for battery-making metals.
QPM plans to take difficult-to-process laterite ore from New Caledonia and leach nickel and cobalt from it using nitric acid.
QPM put a $652m price tag on the construction of its Townville processing facility in a March 2020 pre-feasibility study, but that figure is likely to have blown out significantly.
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