A large reason people were hesitant about the most current version of US electric vehicle subsidies was that it wouldn’t provide funding to vehicle makers who rely on China for minerals used in batteries.
Some argued that if we only used battery materials from friendly countries, it would either lead to a slower EV adoption rate or more sales of PHEVs. If we needed a large battery for an electric car, the criteria to meet this demand would be difficult, but not impossible. Automakers may just end up installing tiny $1,000 or $2,000 batteries into cars instead and receive a substantial $7,500 discount.
Other people noted that the future of EVs is uncertain because they require rare minerals, many of which are controlled by China. This gives Beijing significant power over not just the electric vehicle market, but also global economic security. For example, we know all too well the consequences that come with oil market disruption; oil being a resource pumped and refined in various countries. However, when China has 100% control over battery-grade synthetic graphite, 73% control of cobalt, 68% control of nickel, and 59% control over lithium, it presents a much larger problem.
But, a recent announcement from GM, combined with another story we did recently, shows us that manufacturers are taking future supplies from friendly countries seriously, and just might prove the naysayers wrong.
GM has found a new, cost-competitive source of nickel and cobalt for Ultium battery cells after investing in Queensland Pacific Metals of Australia. The nickel laterite ore will be processed using a proprietary process that reduces waste with no requirement of a tailings dam. As part of the agreement, GM is expected to invest up to $69 million in Queensland Pacific Metals for the development of its proposed Townsville Energy Chemicals Hub (TECH) Project located Northern Australia.
Queensland Pacific Metals’ nickel and cobalt will assist in powering a diverse fleet of trucks, SUVs, vans, and luxury vehicles from GM — such as the Chevrolet Silverado EV, GMC HUMMER EV Pickup and SUV, Cadillac LYRIQ, Chevrolet Blazer EV, and Chevrolet Equinox EV. The last one is particularly important, as it’s a big part of GM’s strategy of providing affordable EVs to catch up to Tesla.
“The collaboration with Queensland Pacific Metals will provide GM with a secure, cost-competitive and long-term supply of nickel and cobalt from a free-trade agreement partner to help support our fast-growing EV production needs,” said Jeff Morrison, GM vice president, Global Purchasing and Supply Chain. “Importantly, the agreement demonstrates our commitment to building strong supplier relationships and is aligned with our approach to responsible sourcing and supply chain management.”
If all goes according to plan, Queensland Pacific Metals’ proposed TECH Project will become one of the leading suppliers of high-grade battery materials. The company is developing a sustainable and environmentally friendly refinery that can produce large quantities of pure nickel and cobalt — two minerals essential for electric vehicle batteries.
“We are absolutely delighted to collaborate with General Motors,” said Stephen Grocott, CEO, Queensland Pacific Metals. “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. 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 belief in our TECH Project and look forward to becoming part of the GM sustainably sourced raw material supply chain.”
Queensland Pacific Metals will use a patented refining and recycling process called the DNi Process to import high-grade nickel laterite ore from New Caledonia for processing at the TECH facility. The environmentally sound methods employed in this technology extract nickel, cobalt, and other precious metals from laterite without causing any damage to the environment.
Queensland Pacific Metals now has the rights to use the DNi Process from Altilium Group, which boasts a more than 98% nitric acid recycling rate and no tailings dam requirements. Plus, it produces less waste overall than traditional extraction processes. All of this is slated to start in 2023.
“GM already has binding agreements securing all battery raw material supporting our goal of 1 million units of annual capacity in North America by the end of 2025,” said Morrison. “This new collaboration builds on those commitments as we look to secure supply through the end of the decade, while also helping continue to expand the EV market.”
GM’s Not The Only One Reaching For Battery Minerals In Australia
As we pointed out in another recent story, Stellantis is doing the same thing: going to the land down under to get access to battery minerals that would qualify for U.S. rebates and tax credits, and give better geopolitical stability.
Stellantis and GME Resources Limited have finalized their binding agreement to sell quantities of battery grade nickel and cobalt sulphate products from the NiWest Nickel-Cobalt Project in Western Australia.
The NiWest project is a nickel-cobalt development enterprise that will produce close to 90,000 tpa of battery-grade nickel and cobalt sulphate for the burgeoning electric vehicle market. So far, more than AU$30 million has been invested into drilling, metallurgical test work, and development studies. A proposed location of the processing facility for NiWest is within approximately 30 kilometers of the Glencore-owned Murrin Murrin operation — currently one of the largest nickel-cobalt operations in Australia.
This isn’t the only supplier they’ve made deals with. Stellantis has also obtained a significant supply of low-carbon lithium hydroxide from Vulcan Energy and Controlled Thermal Resources in Europe and North America, respectively. So it’s clear that getting materials that qualify for tax credits is important to them.
Could These Efforts Make The Tax Credits Workable For BEVs?
These deals alone aren’t enough for U.S. manufacturers to build all of the BEVs we need in order to overcome dependence on China and take advantage of the full tax credit going forward. But it shows that automakers are scrambling to secure compliant supplies, and with more deals like this, they might cover the shortfalls.
Hopefully both mining companies and auto manufactures keep this up and make it possible to sell enough EVs for everyone at prices they can afford after tax credits.
Featured image provided by GM.
