Nemaska Lithium (TSX: NMX; US-OTC: NMKEF) is in the final stages of completing an offtake deal for battery grade lithium hydroxide with Northvolt, a company set up by two former employees at Tesla who hope to build Europe’s largest lithium-ion battery cell factory in Sweden.
If completed, the agreement with Northvolt will be Nemaska Lithium’s fifth offtake deal, following the announcement earlier this month of a transaction with LG Chemical that promises the Korean conglomerate 7,000 tonnes of lithium hydroxide a year for a five-year period starting in October 2020.
LG Chem is one of the world’s leading lithium-ion battery makers.
Nemaska Lithium has already granted Japan’s SoftBank Group the right of first offer to purchase up to 20% of production, and once the Northvolt deal is completed, it will have agreements for more than 90% of its future lithium hydroxide and lithium carbonate production.
Nemaska Lithium is on track to start producing spodumene concentrate in the second half of 2019, with the production of lithium salts following in the second half of 2020.
“Our offtake contracts are multi-year agreements with several lasting for a period of up to five years,” Guy Bourassa, Nemaska’s president and CEO, states in a news release. “We are also actively marketing the company to new and existing institutional shareholders with recent meetings in Asia, United States, London, Europe and Canada from which we have had much positive feedback.”
The company completed a $1.1 billion project financing package at the end of May and has resumed construction work on its Whabouchi mine and electrochemical plant in Shawinigan.
Whabouchi is one of the world’s richest lithium spodumene deposits in volume and grade and the spodumene concentrate produced at the mine will be processed at the Shawinigan plant using a membrane electrolysis process.
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