Following a non-binding agreement in April, Nemaska Lithium (TSX:NMX)(OTCPK:NMKEF) has inked a definitive deal with Northvolt AB to supply the Swedish rechargeable battery maker with battery-grade lithium hydroxide. Founded two years ago, Northvolt is building the largest battery factory in Europe slated to manufacture 32 GWh worth of battery capacity annually in an environmentally responsible manner.
Per the five-year supply agreement, Nemaska will supply between 3,500 and 5,000 metric tonnes of lithium hydroxide annually from its Shawinigan plant through its subsidiary Nemaska Lithium Shawinigan Transformation Inc.
The start date for the contract is based upon commercial production being achieved at both the Shawinigan plant and Northvolt's Skellefteå lithium ion battery factory. As part of the deal, Northvolt is supposed to deliver a 10-million-euro promissory note to Nemaska.
Nemaska chief executive and president Guy Bourassa says that about 90% of the company's future battery-grade lithium hydroxide capacity is already committed.
Nemaska is developing a vertically integrated chemical company, collecting ore from its massive lithium spodumene deposit at the Whabouchi mine in Quebec, Canada and planning to process it at the upcoming Shawinigan plant in Quebec, where Nemaska is employing its proprietary membrane electrolysis process.
After being the talk of markets in 2017, electric vehicles and, more precisely, the importance of the metals that make up their batteries, have fallen out of favor in 2018.
Toronto-listed shares of Nemaska embody this sentiment, skidding from a high of $2.44 in January to as low as 60 cents last week. Shares are making a move Monday morning on the news to build upon a positive days on Thursday and Friday.
About 45 minutes into the trading session, shares of NMX are up 4.0% to 78 cents after touching 81 cents right after the opening bell.
