Quebec’s Nouveau Monde Graphite announces multiyear supply deals with Panasonic Energy and General Motors
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Feb 15, 2024
Brian Banks

Active anode material offtake agreements with leading North American EV battery makers also include an immediate US$50-million investment, with US$275 million in future funding to follow

Montreal-based Nouveau Monde Graphite (NMG) today announced two major binding offtake agreements with Panasonic Energy and General Motors. Image: NMG

Active anode material offtake agreements with leading North American EV battery makers also include an immediate US$50-million investment, with US$275 million in future funding to follow

Montreal-based Nouveau Monde Graphite (NMG) today announced two major binding offtake agreements with Panasonic Energy and General Motors.

The deals will see NMG supply 18,000 tonnes of active anode material annually to each customer from its planned battery material processing plant in Bécancour, Que.

Initial terms of the supply agreements with Panasonic and GM are for seven and six years, respectively. In conjunction, the two companies have also agreed to immediately invest US$50 million in NMG, with another US$275 million to follow.

Combined, these marquee agreements kickstart NMG’s move towards full-scale “Phase 2” construction of its Matawinie graphite mine and Bécancour plant.

Construction timeline assured

In an exclusive interview last week with Electric Autonomy, Eric Desaulniers, NMG’s founder, president and CEO, said the company would require “six months post announcement of offtakes to do all the engineering and do all the requirements for project financing.”

Eric Desaulniers at the 2024 EV Innovation & Technology Conference
Eric Desaulniers, NMG’s founder, president and CEO, speaking at the 2024 EV Innovation & Technology Conference. Photo: Electric Autonomy

In that interview, Desaulniers didn’t disclose when the announcement for these offtake deals would happen, but he did say he was hopeful that “before year-end, we’ll have completed project financing. And then we can move on into construction for 31 months following [that].”

That timeline, which now seems assured, would see the company start production at the plant in mid-2027. Both NMG’s Matawinie mine, located about 120 kilometres north of Montreal, and the Bécancour plant will be built concurrently, said Desaulniers, who spoke to Electric Autonomy after his appearance at the EV Innovation & Technology Conference on Feb. 7.

When it reaches full capacity, NMG says the Bécancour plant will be able to produce 42,000 tonnes of anode material annually, using graphite mined at Matawinie. This means the offtake deals announced today cover approximately 85 per cent of that planned production.

Momentous milestone

In one of several press releases announcing today’s news, Desaulniers underscored the significance of these announcements.

“Today marks a momentous milestone for NMG, highlighting the progress made towards our Phase 2 and the company’s sound business plan of becoming North America’s largest fully integrated natural graphite active anode material producer to serve the booming Western battery and EV market,” said Desaulniers.

NMG’s choice of partners isn’t a total surprise.

While no discussions were public, GM is already a neighbour of NMG’s in Bécancour, where it is building its Ultium CAM cathode active material processing plant. That project is in a joint venture with Posco.

NMG’s discussions with Panasonic, meanwhile, had been public for some time.

The two companies first signed a memorandum of understanding to work towards a multi-year offtake agreement in 2022. Last fall, they released a progress report that included details about Panasonic’s testing using material samples produced at NMG’s Phase 1 demonstration-scale facilities.

It’s also been clear that Panasonic’s appetite for anode materials from North American suppliers is growing. Just last week, it announced a much smaller deal to purchase at least 10,000 tonnes of synthetic graphite anode material from Novonix over a four-year period, starting in 2025. Novonix will supply that material from its new plant in Chattanooga, Tenn., which is targeting a start of production at the end of this year.

Second mine now in view

Today’s news also reinforces the strategic value in NMG’s other recent big move to scale up its holdings and ambitions — specifically, its deal to acquire 100 per cent ownership in a second graphite deposit in Quebec, the Uatnan Mining Project at Lac Guéret, from Mason Resources.

According to the company, Uatnan has the potential to produce 500,000 tonnes of graphite concentrate annually for the 24-year life of the mine. This is five times the volume potential from the Matawinie mine over a similar period. The makes Uatnan, which is located about 220 kilometres northwest of Baie-Comeau, one of the world’s largest graphite projects in development.

In last week’s interview, Desaulniers said that Uatnan is the only other graphite project in North America, other than Matawinie, that is far enough along to go into production before 2030.

The purchase came nearly two years after NMG and Mason signed a deal to develop Uatnan jointly. Desaulniers said the change reflects NMG’s progress towards becoming the leading vertically integrated player in this sector in North America.

“We’re starting to consolidate, by acquiring the most advanced asset,” he said. Under the terms of the deal, Mason acquired a 9.25 per cent stake in NMG. According to Desaulniers, “They would rather prefer having 10 per cent of us than having 100 per cent of something going nowhere.”

Development team in place

The timing was also right for NMG.

“We have a very good development team … that developed the Matawinie mine,” said Desaulniers. “Now it’s going into the construction phase, so we had all those great resources available to develop another project.”

Part of that process will be determining where to build a companion plant, like the one in Bécancour, to produce anode material from the graphite that eventually comes out of Uatnan mine. Baie-Comeau on the St. Lawrence River could be an option, but Desaulniers said right now they “need to look at the pros and cons of every site location.”

A more immediate priority is reaching a benefit agreement with the Innu First Nation of Pessamit. After that, they’ll need several years to complete a feasibility study, an impact study and permitting. “It doesn’t take as long to develop an industrial project, to make a twin plant. It takes way more time to develop a mine,” said Desaulniers.

Unlikely consolidator

The unlikely nature of the opportunity all of this presents for NMG, its partners and stakeholders isn’t lost on Desaulniers.

He says NMG’s strategy to be vertically integrated (doing mining and anode materials processing) is modeled on the approach taken by natural graphite producers in China. However, because Chinese companies are restricted in their ability to acquire graphite mining assets in the west, they aren’t in a position to replicate their strategy in North America. That means there’s also little or no expertise in this space, which has created an opening for a junior like NMG.

“It’s not typically a pre-revenue junior company that is doing the consolidation. It’s typically a bigger guy here,” Desaulniers said. “But there’s no major to do it. It’s all in China.”

While he admits it’s a lot of work for a small company, he said it’s also exciting.

“It’s great. We have a lot of different expertise in the company,” he explained. “It’s a totally different ecosystem. That’s why we’re consolidating the market now. We’re seen as the most advanced and the most serious player.”

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