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Nano One in landmark battery materials deal with Sumitomo Metal Mining

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Canadian battery materials specialist Nano One [TSX: NANO] has signed a key collaboration and investment deal with metals industry giant Sumitomo Metal Mining [TKY: 5713].

Nano One shares closed at CAD 2.87 on Friday, up 11.24% since the start of September.

Sumitomo Metal Mining to invest CAD16.88m

As per the deal, Sumitomo will invest CAD 16.88 million dollars in exchange for a 5% stake in the Nano One at CAD3.07 a share. Equally importantly, it will also work with Nano One to help the company commercialize its production of battery cathode materials lithium iron phosphate (LFP) and nickel-rich chemistries such as lithium nickel manganese cobalt oxide.

Battery materials play a crucial role in electric vehicles but also in electrical storage and other clean tech applications.

Over the summer Nano One completed commercial scale trials of its patented LFP production One Pot technology and is in the process of shipping samples to customers for evaluation. This is a precursor to moving onto signing binding offtake agreements with a number of electric vehicle makers and, on the production side, expanding output to 2,000 tonnes by the end of 2024.

Sumitomo’s General Manager of Battery Material Division Katsuya Tanaka said, “Nano One has proven LFP production experience and has demonstrated that their latest technology works at scale, their materials perform, and their costs are competitive. Nano One is also aligned with our belief that less waste and energy intensive CAM production technology is one of the most important keys to contribute to developing EV markets. This is particularly important in Japan, North America, and other emerging markets where the race to meet net-zero goals and establish battery supply chains is just beginning.”

Having a partner like Sumitomo on its side will help Nano One not only financially but will also provide an opportunity to capture the growing LFP market through production, licensing and joint ventures in Japan, North America and other key markets.

Deal to complement existing partnerships

The latest deal will complement Nano One’s existing partnerships with key industry players which include Rio Tinto, BASF, Umicore and Euro Manganese.

The proceeds of the deal will be used mostly to fund the conversion of Nano One’s existing Candiac LFP manufacturing facility to a One-Pot production scale pilot plant, nickel- and manganese-rich engineering, and piloting activities, and for working capital.

Sumitomo has a long history of mining, smelting and refining metals and is one of the most vertically integrated cathode material makers in the world. It has pioneered nickel-rich cathode materials for long range EVs and in 2022 expanded its cathode material product portfolio to include LFP.

“This announcement builds on years of technology development and CAM production by both Sumitomo Metal Mining and Nano One Materials and it expresses our joint ambitions to develop and lead world-class battery ecosystem,” commented Nano One CEO Dan Blondal.

Nano One to build first commercial LFP plant

Nano One said it plans to build its first commercial LFP plant adjacent to its existing production scale pilot facility in Candiac, Québec and is nearing completion of a Front-End Loading Pre-Feasibility Study that will help determine key factors including costs, production line size, total capacity and timing.

With LFP becoming more important to the electric vehicle (EV) battery market, the company said it can be produced responsibly and cost-effectively in North America, Japan, and other jurisdictions using technology and know-how from both organizations.

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This article does not constitute investment advice. Do your own research or consult a professional advisor.

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