Stellantis Ends Nickel Supply Deal With Alliance Nickel

In a major blow to Australia’s battery materials sector, carmaker Stellantis has announced it will terminate its supply agreement with Alliance Nickel, effective December 3. The decision comes after Alliance missed key milestone deadlines for the NiWest nickel and cobalt project in Western Australia.

The delays, the miner said, were largely due to tough conditions in the global nickel market, which have constrained opportunities to secure financing for new projects. Nickel prices have remained subdued over the past two years, adding pressure on producers and making it difficult to fund large-scale initiatives.

Alliance Nickel highlighted that weaker commodity prices have affected its financial position, prompting it to defer other commitments while seeking adequate funding for NiWest. The project had previously been a cornerstone of Australia’s growing role as a supplier of critical battery materials for electric vehicles.

The original 2023 agreement saw Stellantis commit to purchasing 170,000 tons of nickel sulphate and 12,000 tons of cobalt sulphate over five years, representing roughly 40% of NiWest’s forecast annual output. The deal also included Stellantis acquiring an 11.5% stake in Alliance Nickel, marking the company’s first significant investment in Australian battery materials.

This cancellation is the second supply deal Stellantis has cut with Australian companies in recent days, following the termination of its agreement with battery materials supplier Novonix over unresolved product specifications.

Shares of Alliance Nickel reacted sharply, falling as much as 6.4% in early trading. Industry observers suggest that while this is a setback for the miner, it also opens the door for renegotiation on terms that better align with revised project timelines and market realities.