Panasonic Energy has reached a binding offtake agreement with Canada’s NMG, securing an annual supply of 18,000 tonnes of active anode material.
Set for an initial seven-year period, the deal is integral to Panasonic's strategy to establish a carbon-neutral and responsible battery manufacturing value chain in North America.
The offtake agreement is supported by a $25m (Y3.76bn) investment from Panasonic, which will aid the advancement of NMG's Phase-2 operations.
This investment is the first tranche of funding that underscores Panasonic's commitment to NMG's execution plan for its Phase-2 Matawinie Mine and Bécancour Battery Material Plant.
Panasonic aims to leverage NMG's fully integrated production, from ore to battery materials, to ensure a sustainable supply of natural graphite.
The company's proactive environmental, social, and governance practices are also a key factor in the collaboration.
Furthermore, Panasonic plans to co-invest nearly $150m, subject to a maximum ownership threshold, to support the construction of NMG's Phase-2 facilities.
This is contingent upon a positive final investment decision and could involve potential co-investors.
The agreements with Panasonic, alongside a parallel transaction with General Motors, provide NMG with the financial means and technical parameters to progress the engineering of the company’s Phase-2 Bécancour Battery Material Plant.
Additionally, NMG will enter into an investor rights agreement and registration rights agreement with Panasonic upon closing the Tranche 1 investment.
NMG also secured a combined $37.5m from partner Mitsui and long-term investor Pallinghurst.
These offtake agreements and investments signify a substantial step towards securing future funding from anchor customers, potentially reaching up to $275m, subject to specific conditions.
Panasonic president and CEO Kazuo Tadanobu said: “We are thrilled about Panasonic Energy’s strategic investment in NMG and the long-term offtake agreement, marking a significant milestone in our medium-to-long-term management goals aimed at strengthening the North American supply chain for EV [electric vehicle] batteries.
“This initiative aligns with our vision for sustainability, prioritising locally sourced materials and leveraging NMG’s impressive vertically integrated supply chain.
“The bilateral partnership between Japan and Canada adds another layer of significance to our investment, and Panasonic Energy takes pride in contributing to the deepening ties and shared goals in advancing battery supply chains together with NMG.”
