Nouveau Monde Graphite stock rises on deals with GM, Panasonic

Article content A Quebec miner looking to weaken China’s grip…

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A Quebec miner looking to weaken China’s grip on the graphite market has inked deals to supply General Motors Co. and Panasonic Holdings Corp. with a commodity that’s required to make electric-vehicle batteries.

Anode materials in EV batteries are mostly made from graphite and Nouveau Monde Graphite Inc. has agreed to provide 18,000 tonnes of it for multiple years to both companies once it starts production.

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“This (agreement) is really what we were missing from North America, a clear commitment from tier-one customers,” Nouveau’s chief executive Eric Desaulniers said. “We really need this strategic graphite anode material. We cannot just rely 100 per cent on China today.”

The demand for EV batteries is expected to rise as the world looks to gradually transition away from fossil fuels. Several western nations including Canada and the United States have introduced policies to encourage this transition.

However, production of the critical minerals required to make these batteries is largely controlled by China, the world’s leading producer of graphite and a country the West is trying to reduce its reliance on for raw materials.

Once Nouveau starts production, it will supply GM for six years and Panasonic for seven. The sales price will depend on future prevailing market prices, Nouveau said. GM has also committed to invest US$150 million in the company in two phases, while Panasonic has agreed to invest US$25 million.

Together, the supply agreements will make up about 85 per cent of Nouveau’s future production, which Desaulniers said is enough to make a final investment decision on its battery materials plant that it hopes to build.

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The company is currently looking to advance its battery materials plant project in Bécancour, about 150 kilometres northeast of Montreal on the Saint Lawrence River.

Along with its proposed battery plant, Nouveau is also developing its Matawinie mine project in Saint-Michel-des-Saints, Que. The plan is to mine the graphite from Matawinie and refine it in the battery plant, with production starting in early 2027.

Like with many other battery materials, the price of graphite has fallen in the last year.

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“Nobody is making money at the current graphite price,” Desaulniers said. “To justify projects in North America, you need agreements like we got today.”

GM and Panasonic both described the agreements as milestones for the North American battery industry.

Nouveau’s share price rose 28 per cent, or 76 cents, to $3.56 on the Toronto Stock Exchange by midday on Feb. 15. The company has a market cap of around $238 million.

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