Nouveau Monde Graphite scores deals with GM, Panasonic

Nouveau Monde Graphite (TSXV: NOU; NYSE: NMG) has signed multi-year offtake agreements with General Motors (NYSE: GM) and Panasonic Holdings, with both companies also vowing to invest in the Quebec-based miner to help it produce high-quality graphite in North America.

GM and Panasonic have each committed to purchase 18,000 tonnes of active anode material annually over a period of six to seven years, Nouveau Monde said.

They are also making equity investments of US$25 million each in the company.

The two firms and potential co-investors could join future rounds of financing worth hundreds of millions of dollars, the miner said in a statement.

In total, Nouveau Monde announced funding of US$87.5 million, including US$12.5 million from London-based private equity shop Pallinghurst Resources and US$25 million from Japan’s Mitsui & Co. that will be used to repurchase their previously announced convertible notes.

“We had been looking for top-tier EV and battery manufacturers to bolster our commercial vision [of becoming a leader in the market],” Nouveau Monde’s founder, president and chief executive, Eric Desaulniers, said. “Thanks to visionary customers and investors, we are now moving toward establishing a fully local and traceable value chain.”

Nouveau Monde aims to raise US$1.2 billion to build the whole project, with US$725 million coming from debt and US$475 million from equity.

The Montreal-based company aims to become North America’s first fully integrated source of natural graphite active anode material, which accounts for about half of an electric vehicle (EV) battery. 

To achieve this goal, the miner is developing the Matawinie project in Saint-Michel-des-Saints, Que., about 100 miles north of Montreal, where it also plans to build a graphite concentrator. 

Nouveau Monde will also install a refining facility for the production of active anode material in Becancour, Que. This is the same area where GM and Ford are already constructing EV battery-component facilities.

The Matawinie open pit mine is expected to produce 103,000 tonnes of graphite a year over the course of 25 years and is part of a larger strategy to turn Canada into a production centre for lithium ion batteries. 

The investments and agreements are seen as a testament to the company’s bankability and are expected to boost the commercialization of a local and traceable value chain for the EV market in North America.

Map of NMG’s integrated extraction and advanced manufacturing routes to supply Panasonic Energy and GM. Credit: Nouveau Monde Graphite

The West is looking for sources of graphite outside China, the world’s top producer and exporter, which also refines more than 90% of the world’s graphite into the material that is used in virtually all EV battery anodes.

This quest to bring graphite projects to fruition has become more urgent in the past months, as China announced in October it will require export permits for some graphite products.

Nouveau Monde said its recent acquisition of the Uatnan project for its Phase-3 expansion also provides a supply opportunity for Western EV and battery manufacturers looking to secure and grow active anode material volumes as their production increases.