Stellantis walks away from NiWest deal: What’s next for Alliance Nickel (ASX: AXN)?

Alliance Nickel Ltd (ASX: AXN) confirmed on November 7, 2025, that global automotive group Stellantis N.V. (NYSE: STLA; Euronext Milan: STLAM; Euronext Paris: STLAP) has issued a formal termination notice for the binding offtake agreement it had entered into with the Australian miner in May 2023. The supply arrangement was set to provide battery-grade nickel sulphate and cobalt sulphate from the NiWest project located in Western Australia. However, due to missed contractual milestones linked to project development, the agreement will become inoperative effective December 3, 2025.

The missed milestones were directly tied to the development progress of the NiWest project, which has been delayed significantly by deteriorating conditions in the global nickel market. Sustained price weakness over the last two years has undermined project financing efforts across the sector, leaving Alliance Nickel unable to advance construction or secure funding under acceptable terms. As a result, the miner is now reevaluating its strategic options and has publicly acknowledged that a potential listing on the Nasdaq via a Special Purpose Acquisition Company transaction is under consideration to reinvigorate its funding pipeline.

While the offtake termination marks a setback, Alliance Nickel has emphasized that the door remains open for a renegotiated agreement. Stellantis has reportedly expressed continued interest in the NiWest asset and is open to discussions about revised terms that better reflect the updated project timeline and market dynamics. According to Alliance Nickel Managing Director Paul Kopejtka, the current situation presents an opportunity to “negotiate on a new agreement” that aligns more closely with the miner’s revised forward strategy.

Why Stellantis chose to terminate the original NiWest supply agreement with Alliance Nickel

The termination stems from the inability of Alliance Nickel to meet specific development milestones that were contractually embedded in the May 2023 offtake agreement. Under the original deal, Stellantis had committed to purchasing approximately 170,000 tonnes of nickel sulphate and 12,000 tonnes of cobalt sulphate over an initial five-year period. This volume would have accounted for around 40 percent of the projected annual output from the NiWest project. As part of the strategic supply partnership, Stellantis also acquired an 11.5 percent equity stake in Alliance Nickel, reinforcing its intent to secure critical battery minerals from Australian sources.

However, the timing of the agreement coincided with an extended slump in global nickel prices. Oversupply from high-volume Indonesian producers, rising geopolitical uncertainties, and declining demand from certain battery chemistries all contributed to price pressures. These market headwinds have made it increasingly difficult for non-producing junior miners like Alliance Nickel to attract capital at viable terms. With financing stalled, project development milestones were inevitably missed, prompting Stellantis to exercise its right to terminate the agreement.

Despite this outcome, the Italian-French automaker has maintained an open stance toward future collaboration. Alliance Nickel has confirmed that Stellantis remains “willing to renegotiate offtake terms,” suggesting that the strategic rationale behind the original partnership still holds weight, albeit on revised timelines.

What does the termination mean for the NiWest project’s funding and development outlook?

The termination of the Stellantis agreement creates immediate headwinds for Alliance Nickel’s near-term financing strategy. Losing a high-profile offtake partner removes a key de-risking element that would have supported institutional capital inflows. The financial markets responded with caution, with shares of Alliance Nickel falling as much as 6.4 percent in early trading following the announcement.

That said, the miner is not retreating. Alliance Nickel has publicly disclosed that it is exploring a potential Nasdaq listing via a Special Purpose Acquisition Company, or SPAC, as a way to unlock U.S.-based investor interest. A successful SPAC transaction could provide the required capital injection to restart development activities while also boosting the company’s valuation and visibility within the global battery supply chain.

This path is not without challenges. SPAC activity in 2025 has slowed significantly compared to the previous cycle, and market conditions are less favorable for long-gestation mining projects. Much will depend on the credibility of the SPAC sponsor, the quality of the merger terms, and market appetite for exposure to battery mineral assets. If Alliance Nickel can successfully execute such a transaction, it could restore its ability to fund NiWest and potentially re-attract offtake partners, including Stellantis.

How does this reflect broader EV battery supply chain dynamics involving Australian developers?

Stellantis’ termination of the Alliance Nickel deal marks the second time in recent weeks that the automaker has exited a supply agreement with an Australian battery materials provider. Earlier in November 2025, Stellantis withdrew from a deal with Novonix Limited, citing an inability to reach agreement on product specifications. These twin pullbacks may indicate a recalibration of Stellantis’ procurement strategy as it balances upstream commitments with technology uncertainty in the evolving battery chemistry landscape.

The moves also underline the precarious position that many Australian critical mineral developers currently occupy. Australia is frequently cited as a top-tier jurisdiction for future-facing minerals such as lithium, nickel, cobalt, and rare earths. Yet the conversion of exploration success into full-scale production remains difficult in the absence of long-term offtake security and competitive financing structures.

Alliance Nickel is among several junior miners navigating this terrain. The NiWest project itself is considered a high-quality, development-stage asset with compelling resource estimates and location advantages. However, as with many early-stage projects, it remains heavily dependent on securing cornerstone partnerships and access to capital markets.

What does the Alliance Nickel share price movement reveal about investor sentiment in 2025?

The initial share price decline of 6.4 percent following the termination announcement reflects investor disappointment but not outright panic. Some institutions appear to be taking a wait-and-watch approach, potentially factoring in the possibility of a SPAC-driven funding pivot or renegotiated offtake terms. The presence of Stellantis as a strategic investor may continue to lend credibility to the asset, even as the terms of their involvement evolve.

Institutional sentiment remains cautious overall. Investors are expected to demand clearer roadmaps from Alliance Nickel in terms of project financing, construction timelines, and downstream partnerships before resuming bullish positions. Given recent volatility in the nickel market, analysts are likely to reassess their valuation models and risk ratings for NiWest until new milestones are confirmed.

The upcoming months will be critical. Any progress on SPAC listing discussions, renewed interest from other offtakers, or material announcements on project advancement could swing sentiment significantly in either direction.

Is the long-term outlook for nickel still supportive of NiWest’s strategic positioning?

Despite near-term pressures, many analysts maintain a positive long-term outlook for Class 1 nickel, particularly given the anticipated growth in electric vehicle adoption and the demand for high-nickel cathode chemistries. While lithium iron phosphate (LFP) batteries have gained traction in certain vehicle segments, nickel-intensive chemistries continue to dominate performance-driven and long-range EV applications.

From a macro perspective, the push for battery supply chain diversification, especially away from China and Indonesia, remains strong across Europe and North America. This geopolitical tailwind continues to support the strategic relevance of projects like NiWest, even if commercial execution timelines need to be revised.

Alliance Nickel’s management remains optimistic, with Kopejtka reiterating that the long-term outlook for both nickel and cobalt remains positive. His remarks reflect a belief that market cycles are temporary and that demand fundamentals will eventually reward well-positioned, development-ready assets with quality resource profiles.

What remains to be seen is whether that optimism can translate into binding agreements and bankable funding within a realistic time horizon. Until then, the NiWest project sits at a crossroads, emblematic of both the opportunity and fragility inherent in today’s critical minerals ecosystem.

What are the key developments after Stellantis terminated its offtake deal with Alliance Nickel?

• Stellantis N.V. has formally terminated its nickel and cobalt offtake agreement with Alliance Nickel Ltd (ASX: AXN), effective December 3, 2025, citing missed project milestones.
• The original May 2023 deal covered 170,000 tonnes of nickel sulphate and 12,000 tonnes of cobalt sulphate over five years, representing 40% of NiWest’s expected output.
• Weak global nickel prices over the past two years have impacted financing options for the NiWest project, delaying development and derailing the deal’s timeline.
• Alliance Nickel’s share price dropped as much as 6.4% following the announcement, reflecting short-term investor caution.
• Stellantis remains open to renegotiating the agreement under revised terms that better reflect the new project timeline and market conditions.
• Alliance Nickel is actively exploring a Nasdaq listing through a Special Purpose Acquisition Company (SPAC) to secure alternate financing.
• This marks Stellantis’ second termination of an Australian battery material supply deal in recent weeks, following its exit from an agreement with Novonix Limited.
• Analysts continue to view the long-term outlook for Class 1 nickel positively, though short-term funding challenges are likely to persist across the sector.
• The NiWest project remains strategically important for the electric vehicle supply chain, but future development now hinges on successful capital raising or a new offtake agreement.