Nemaska Lithium & Johnson Matthey Battery Materials Sign Final Agreements For Lithium Salts Supply From New Plant

Nemaska Lithium, along with its wholly owned subsidiaries, and Johnson Matthey Battery Materials of Candiac, Quebec — a wholly owned subsidiary of Johnson Matthey — have signed final agreements concerning the supply of lithium salts from the Nemaska Lithium Phase 1 Plant.

The new agreements — first considered in a memorandum of understanding between the two companies signed last November — will see Johnson Matthey Battery Materials make an upfront payment of CAD$12 million in exchange for goods + services to be provided by the Nemaska Lithium Phase 1 Plant; as well as establish a long-term supply relationship between the two firms for lithium salts.

Nemaska lithium

The terms of the agreement will see the CAD$12 million deposited in an escrow account, and then disbursed to Nemaska Lithium following the achievement of certain milestones. The new long-term supply agreement represents Nemaska Lithium’s first commercial offtake agreement.

The press release provides further information:

The closing of the JMBM agreement completes the financing of the Phase 1 Plant. The total budget to build and operate the Phase 1 Plant for two years is CAD$38 million, of which CAD$12 million comes from JMBM up-front payment, CAD$13 million from a grant from Sustainable Development Technologies Canada (SDTC), CAD$3 million grant from Technoclimat program through the Bureau de l’efficacité et de l’innovation énergétiques of the Ministère de l’Énergie et des Ressources naturelles and finally a CAD$10 million equity investment by Ressources Québec. To date, progress payments have been received from SDTC and Technoclimat for a total of CAD$2.85 million. With today’s closing Nemaska Lithium will receive a further installment of CAD$2.1 million from SDTC.

The Managing Director of Johnson Matthey’s global Battery Materials business, Neil Collins, commented: “We are delighted to have signed these agreements today with Nemaska Lithium; securing the long term supply of lithium salts is an important part of our strategy as we continue to grow our Battery Materials business.”

The President and CEO of Nemaska Lithium, Guy Bourassa, commented as well: “We are very pleased to be moving forward with our Phase 1 Plant and to having negotiated our first commercial offtake agreement with JMBM. To date, we have made significant progress on the detailed engineering of the Phase 1 Plant and have ordered some of the long-lead items, including the core electrolysis stacks and rectifiers. We expect to complete construction of the Phase 1 plant by the end of 2016 and to be engaging potential clients with commercial samples of lithium hydroxide as early as Q2 2017.”

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