Swedish lithium-ion battery maker Northvolt has signed an agreement in principle for the supply of battery grade lithium hydroxide from Canada’s Nemaska Lithium.
Northvolt said it will receive up to 5,000— but not less than 3,500 metric tonnes per year— of lithium hydroxide on a take-or-pay basis for a five-year supply period.
The period will begin upon the start of commercial production at both Nemaska’s Shawinigan facility and Northvolt’s Skelleftea facility— which is expected to produce 8GWh of battery capacity every year. On full completion in 2023, the factory will have a production capacity of 32GWh annually.
As part of the supply agreement, subject to the approval of the boards of each company, Northvolt has agreed to give Nemaska a EUR10 million promissory note that could be converted into voting shares in Northvolt in connection with its factory development funding— or redeemed at cost plus an agreed interest rate.
Meanwhile, Northvolt has started of its Northvolt Labs research facility, due for completion next year, which will be used to develop, test and industrialise lithium-ion battery cells before large-scale production.
Sweden has been designated as a key player in the EU’s ‘batteries alliance’— through which Europe aims to push back on Asia’s dominance in the battery sector. The European Investment Bank has already agreed to finance construction of Northvolt’s lithium-ion battery manufacturing plant at Vasteras.
Last December, Nemaska announced the production of 1.5 tonnes of battery grade lithium hydroxide produced from its Whabouchi spodumene mine in Quebec.