Did northvolt change the game?Delaying the partner financing this long after management conditioned us to expect it would be "immediate" after permitting has been really frustrating. We are also closing in on the end of the "Conservative schedule" and 10 months after final permit, still no deal.
Is it really that complicated to put all the pieces into one package, maybe, but I doubt that's the real under-lying reason. Good lord PMET pre-negotiated Albermarle's investment so they could announce right after the initial resource was released. When the resource did get announced, the very next day another press release, Albermale to invest 100 million then 2 days later it closed, think about that 4 days and done, 100 million deposited in PMETs account. Yes this is a simple deal, but ducks can be lined up in short order.
That is more like what was expected after CRE got final permit. They had pre-negotiated most of the details and it would close quickly, they've had years of negotiations. I don't doubt for a minute that's what was supposed to happen because that was the plan, they told us so in not so many words. Instead of going down the management bashing road to nowhere, I've been trying to understand what could have caused management to change the original game plan.
northvolt recently announced they have raised 1.2 billion in funding provided by Canada Pension Plan, and Blackrock that will seal the deal for the battery plant in Quebec. It will be officially announced by the beginning of October according to news media speculations. If that's the case production maybe end of 2025 or Q1 2026.
northvolt wants to build the worlds greenest batteries!
northvolt says they have more than 55 billion dollars in orders.
northvolt have stated, they want to control their supply chain including the processing of Lithium chemicals.
Their chem plant partnership with Galp in Portugal supports this idea and I suspect northvolts plan for North Americal/Quebec will have a similar structure. It's an interesting read also look at Savannah Resources Barroso mining project also in Portugal. A classic hardrock spodumene mine with dms and floatation circuits. This is where Galp will source SC6 from.
northvolt sources hydroxide from a few places.
Partner Galp are building a hydroxide plant in Portugal to supply northvolts European operations. Plan to be in production by 2026. They also get material from Australia through an agreement with Tianqi who own half of greenbush through Talison. This agreement ends in 2025. northvolt actually had an aggrement with Nemaska back in 2018 for upto 5,000 t hydroxide to supply a northvolt factory in Sweden.
Where will the Quebec northvolt plant get material?
The plant will be capable of powering 1 million vehicles per year. At capacity that's around 60,000t LCE required or 53,000t hydroxide or 400,000 t SC6! I have no idea how much LCE the recycling part of the operation would contribute. The northvolt plant, GM/Posco 2025, Ford/EcoPro 2026 and BASF's CAM 2025 are being built in Quebec because of proximity to IRA compliant raw materials. They can import some material from outside North Amercian for a time as they ramp up because they have no choice. They will however want acess to as much locally sourced material as soon as possible.
The northvolt/Galp chem plant in Portugal has a 35,000t hydroxide capacity of which northvolt currently has offtake for 50% of production. In theory short term they could take 100% off take and ship to Quebec. Portugal is a lot closer to Quebec than Australia or South America after all but they'd still be very short supply. In addition, given the capacities and ramp up plans for their european factories it would be robbing peter to pay paul if they did this.
With that in mind,
The Allkem/Livent merger means Allkem now controls the Wabouchi mine and the James Bay (galaxy) deposit. The James Bay mine is still waiting for its Quebec permit...perhaps it happens this fall or Q1/2024 only COMEX knows for sure. The galaxy mine/concentrator would still be quite a long way from production, considering Allkem/Livent currently have lots on there plate to get Wabouchi up and running and building the hydroxide plant (currently spec'd at 34,000t hydroxide) This is also the feedstock capacity from only the Wabouchi mine. I doubt they'ed take on another mine/concentrator build right away as that would also have implications for the chemical plant design.
13,000t hydroxide of this supply is already taken by the Ford agreement starting in 2025 leaving 21,000t available. Ford will initially take SC6 form Wabouchi until hydroxide plant is running.
GM also have agreement that starts in 2025. They have stated a goal to increasingly move processing to North America from South America until it is 100% sourced here as their agreement progresses through 2031.
Though that agreement doesn't state volume, GM says by 2025 1 million vehicles to be produced in North America so in 2025 its total material requirement is in the 60,000t LCE range. GM locked up all the phase 1 supply from LAC's thacker pass (40,000t LCE) due to start commercial production at end 2026 ramping to capacity over 4 years....So 12,000t - 2027, 24,000t - 2028, 36,000t - 2029, 40,000t 2030
My question here is in order to do the supply transition from South America to North Americal how much material needs to come from Becancour in the 2025-2030 timeframe to supply GM. The answer is probably whatever can be produced, leaving nothing available.
Sayona has started shipping concentrate.
Current capacity is 226,000 t SC6 concentrate and production will ramp up to full capacity through 2024/2025 .
185,000t are already spoken for
Piedmont/TSLA supply agreement at 125,000t SC6, another 50,000t to LG Chem
Running at capacity by end of 2025 leaves only 41,000 t SC6 or 6,000t LCE potentially available.
Most of Sayona capacity appears to be taken. The wording in Piedmonts agreement state "their share is 110,000t or 50% of production which ever is greater". No matter how fast or how much they expand 50% of production always gets taken off the top by Piedmont . Alot of Sayona's material is leaving Quebec.
Earlier in June a number of articles appeared stating Quebec/northvolt were very close to agreement citing those close to the negotiations and would likely be announced in a few weeks...that would have been in early July but it didn't happen. Eric stated in the Crux interview they have been working on these "negotiations for a few months". That statement caught my attention because as we know they've actually been in negotiations for years with various parties. It sounded to me like he is referring to some new deal that had not been seriously considered before.
As northvolt negotiations with Quebec moved along from last fall, at some point did they realise northvolt would be very short locally supplied material for a very long time. Wouldn't you want assurances/agreements in place for the local raw materials supply before agreeing to a 6 billion dollar factory? A battery plant is so critical to Quebec battery supply chain aspirations.
Did they get to a point and realise they can't close northvolt unless they get access to CRE's offtake?
Would Quebec sit by and watch CRE's 225,000t SC6 potentially leave the province when it's really needed at home?
According to the Quebec lobby register, northvolts lobby period started exactly on March 24,2023.
As negotiations got serious and progressed, did Quebec and northvolt spend the last 5 months convincing CRE to change it's plans and do a deal with northvolt instead?
Is a CRE anouncement now simply on hold waiting for the northvolt and Quebec negotiations to complete?
I've been banging my head so much over our current situation that I am probably delusional.
This can't possibly be what has actually been playing out behind the scenes all this time...right?
cheers