Queensland Pacific Metals (QPM) have signed a binding agreement with General Motors (GM) in order to support the demand for sustainable electric vehicle (EV) production.
GM is set to invest up to $69m, consisting of an initial $25m investment, along with a final investment decision (FID) of up to $44m. The deal has seen the share price of QPM increase by more than 18%.
GM will subscribe for more than 174.6m shares in QPM at a price of $0.18 per share. It is set to drive the company’s focus on sustainability, ensuring they are able to deliver the world’s cleanest produced nickel and cobalt to support EV demand.
Boosting critical mineral production with the TECH project
Subject to its satisfaction with the definitive feasibility study at the Townsville Energy Chemicals Hub (TECH) project, GM will also participate in any equity raising QPM undertake as part of an FID to construct the TECH project.
This means that GM’s offtake rights for Phase 1 of the project have been extended to its entirety. They have also been granted the right to purchase all of the nickel and cobalt sulphate produced under Phase 2 of the project, which are key components in the production of sustainable EVs.
This includes 6,000 tonnes per year of nickel metal, increasing to 16,000tn per year when commitments are met. Moreover, GM are entitled to purchase 800tn of cobalt metal, which is set to increase to 1800tn. The increased production of these critical minerals under the TECH project will see a huge increase in EV production.
A study into the project estimated that it could produce 565,714tn of ore over a 30-year time span. The mineral would contain 26,398tn of nickel sulphate, 3,097tn of cobalt sulphate, and 4,007tn of high-purity alumina.
The investment price will be on the same basis as offered to other investors participating in the equity raising. GM’s commitment of $44m, plus the balance of the initial investment, provides a “material cornerstone position to support any fundraising,” QPM said.
What the collaboration means for the future of the critical mineral supply chain
“We are absolutely delighted to form this partnership collaboration with GM. GM’s strategic direction, company values, and focus on sustainability in its pursuit of making electric vehicles for all is a perfect fit for Queensland Pacific Metals and our TECH project,” said Dr Stephen Grocott, Managing Director at QPM.
He continued: “GM’s investment in our company, and the associated offtake, brings us one step closer towards construction of the TECH project, where we will one day aim to deliver the world’s cleanest produced nickel and cobalt. We thank GM for their support of our TECH project and look forward to becoming part of the GM sustainably sourced raw material supply chain.”
Jeff Morrison, Vice President for Global Purchasing at GM said that the collaboration with QPM will “provide the company with a secure, cost-competitive and long-term supply of nickel and cobalt from a free-trade agreement partner to help support its fast-growing electric vehicle production needs.”
He concluded: “Importantly, the agreement demonstrates our commitment to building strong supplier relationships and is aligned with our approach to responsible sourcing and supply chain management.”
