Stellantis Alliance Nickel offtake agreement unravels as nickel prices slump

Stellantis

Stellantis Alliance Nickel offtake agreement is ending, underscoring how weak nickel markets are reshaping EV battery contracts. The Stellantis Alliance Nickel offtake agreement covered nickel and cobalt sulphate from Australia’s NiWest project but failed on key milestones. As a result, the Stellantis Alliance Nickel offtake agreement now joins a growing list of battery metal deals under pressure from low prices and tight funding.

NiWest delays expose battery metals project risk

Alliance Nickel and Stellantis agreed in 2023 to supply 170,000t of nickel sulphate and 12,000t of cobalt sulphate. The volumes represented around 40pc of NiWest’s forecast production, anchoring the project’s commercial foundation. However, low nickel prices and tighter financing conditions have slowed NiWest’s development and triggered missed contractual milestones.

Market conditions have turned sharply since the deal was signed. Oversupply from Indonesia and softer demand from EV and steel sectors have hit prices. The LME three-month nickel price has dropped nearly 40pc since May 2023, falling to $15,117.50/t by 7 November. In this context, long-term offtake commitments are harder to sustain for both miners and OEMs.

The termination becomes effective on 3 December, formally ending the 2023 agreement. For Alliance, the loss of a top-tier automotive anchor customer complicates project financing. For Stellantis, it removes a fixed nickel sulphate commitment tied to a project still at the development stage.

EV supply chains tighten standards on battery materials

Stellantis is also recalibrating its broader battery materials portfolio. Earlier this week, it cancelled a supply agreement with Australian battery materials supplier Novonix over product specification issues. This second cancellation highlights how automakers now demand tighter performance, quality and timing certainty from upstream partners.

Battery metal developers face a tougher landscape as OEMs pursue flexibility and risk diversification. Projects like NiWest must now compete not only on resource quality and ESG credentials, but also on cost resilience under low-price scenarios. Stronger balance sheets, staged developments and diversified customer bases will be critical to securing future offtake.

At the same time, OEMs remain under pressure to secure long-term critical mineral supply for electrification targets. Strategic partnerships will likely shift toward more advanced projects, integrated value chains, and suppliers with proven technical and financial execution.

The Metalnomist Commentary

The collapse of the Stellantis Alliance Nickel offtake agreement illustrates how quickly the battery metals balance of power can shift. When nickel prices slide and capital tightens, marginal projects and early-stage offtakes become vulnerable, even with blue-chip OEM partners. For miners, bankable projects now require true cost competitiveness and technical robustness, not just strong EV narratives.