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Canadian battery materials mining company Nouveau Monde Graphite (TSXV:NOU) (NYSE:NMG) announced last Thursday that the company have respectively signed supply and financing agreements with the automotive giant General Motors (NYSE:GM) and Panasonic (TSE:6752).
Nouveau Monde is a mineral exploration company based in the province of Quebec, Canada, specializing in the exploration, evaluation, and development of mineral resources. The company is currently developing an anode material based on natural graphite, which will qualify as a battery-grade material for the lithium-ion industry. The company operates two divisions: the Matawinie mine project division and the battery materials factory project division.
Graphite is a form of pure carbon and is a key raw material in electric vehicle batteries. Alongside the development in related fields, the global graphite market is expected to reach an economic scale of $41.5 billion by 2029. With the enactment of the “Inflation Reduction Act,” the United States has imposed origin requirements for raw materials for electric vehicle batteries.
China has always been a leader in the global graphite market. In 2023, the Chinese Ministry of Commerce and the General Administration of Customs optimized and adjusted temporary export control measures for graphite items, formally including three highly sensitive graphite items, such as spherical graphite, in the list of dual-use export control items.
Returning to the agreements themselves, NMG has signed a long-term supply agreement with General Motors for 18,000 tons/year of active anode material, and General Motors will provide an initial $25 million equity investment to support the development and construction of NMG’s Matawinie mine and Becancour battery materials factory. If certain conditions are met, General Motors also commits to subscribe to an additional $125 million in equity.
Jeff Morrison, Vice President of Global Purchasing and Supply Chain at General Motors, stated that the cooperation with NMG is a milestone for the entire industry and is an important part of the company’s efforts to build a more sustainable and resilient battery supply chain. From investments in assembly and battery factories in the United States to the entire supply chain, the company is building an ecosystem for electric vehicles in North America.
At the same time, NMG has also signed similar supply and financing agreements with Panasonic Energy and a subsequent commitment for approximately $150 million in financing for the construction of phase 2 facilities. Together, these two supply agreements account for approximately 85% of the planned active anode material production at NMG’s phase 2 Becancour battery materials factory.
The natural graphite mined in phase 2 of the Matawinie mine will be transported to NMG’s phase 2 Becancour battery materials factory, processed into active anode material, and then transported to the battery factory for the final production of electric vehicle batteries.
