Alliance Nickel will sell nickel and cobalt sulphate from its proposed NiWest project in WA to Vietnam’s largest private conglomerate in a major boost to its future development.

VinES Energy Solutions, a subsidiary of South East Asian corporate giant Vingroup, has agred a non-binding MoU for not just future offtake but potentially project financing for the NiWest project.

Debt, offtake prepayment or project equity options will all be investigated by Alliance and VinES, whose parent company VinGroup made a multi-billion dollar investment to set up Vietnam’s first domestic car manufacturer in 2017, as part of the overall banking process.

VinES specialises in the R&D and the manufacturing of advanced batteries for mobility and energy storage applications.

It is a major development for Alliance Nickel (ASX:AXN), which in October last year signed a similar agreement and announced an investment from Chrysler and Fiat producer Stellantis.

At around US$30,000/t, LME nickel prices have entered 2023 at their second highest start of year level in history, only eclipsed by the China-led steel boom of 2006-2007.

The deal reflects the steaming hot demand for nickel in batteries and battery grade products from the NiWest Nickel-Cobalt project, where more than $35 million has been invested in drilling, metallurgical test work and development studies.

Located within 30km of Glencore’s Murrin Murrin Nickel Mine, the largest nickel laterite operation in Australia and the biggest cobalt producer globally outside the Democratic Republic of the Congo, NiWest is an advanced developed that will produce around 97,000t of nickel and cobalt sulphate products for the growing EV market annually.

Collaboration the key

The MoU includes the specification of nickel and cobalt offtake products, price referencing mechanisms and “the mutual understanding of Alliance and VinES to evaluate and discuss a Definitive Agreement based on the concurrent progression and conclusion of product offtake terms and project financing terms.”

Alliance says they will now work collaboratively towards a binding agreement.

“We are delighted to have attracted the interest of VinES, a forward-looking, ESG focused EV battery manufacturer which has demonstrated exceptional understanding of the upstream battery materials business,” Alliance managing director Paul Kopejtka said.

“Alliance’s strategy is to identify and introduce strategic partners interested in product offtake and which are also capable of providing project financing to the NiWest project.

“We’re very pleased with how well-aligned and complementary our businesses are and with how our discussions have progressed so far. We look forward to working with VinES as an offtake and project financing partner for our NiWest project.”

VinEs CEO Pham Thuy Linh said the NiWest deal would strengthen VinES’ supply chain.

“Securing nickel and cobalt sources will strengthen our integrated supply chain and ensure VinES’ comprehensive sustainable development,” she said.

“I believe the MOU with Alliance shall lay the sound foundation for our mutual efforts in accelerating the growth of business and seizing opportunities in the EV supply chain.”

 

 

 

This article was developed in collaboration with Alliance Nickel, a Stockhead advertiser at the time of publishing.

 

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.

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