Stellantis drops Australian nickel deal due to market concerns

The NiWest project is one of Australia’s highest-grade nickel-cobalt projects.  

Stellantis will terminate its supply deal for battery-grade nickel and cobalt from Alliance Nickel’s (ASX: AXN) NiWest project, will effective December 3. 

Stellantis cited challenging nickel market conditions and associated project financing constraints as the cause of the termination. 

The initial agreement signed in 2023, saw Stellantis buying 170,000t of nickel sulphate and 12,000t of cobalt sulphate, representing about 40% of NiWest’s predicted output over five years.  

The past two years have seen the global nickel market take a hit due to a surge in supply from lower-cost countries like Indonesia coming online. 

Currently, nickel is at a 7-week low with the underperformance placing increased pressure on the industry.  

This termination is the second battery materials supply deal to be cancelled by Stellantis this month after Novonix reported a similar termination over product specifications.  

Despite the negative trend of the nickel market, Alliance managing director Paul Kopejtka says he remains optimistic about the future of nickel. 

“I firmly believe that the long-term outlook for nickel and cobalt remains positive,” he said.

Both Alliance and Stellantis say they are willing to renegotiate the decision following changes in the nickel market.