General Motors (GM) has agreed to invest up to $69m and buy an equity stake in Queensland Pacific Metals (QPM) to secure nickel and cobalt for battery cell production in the US.

The investment is expected to help GM allow electric vehicles (EVs) to be eligible for consumer incentives under the US’ new clean energy tax credits, according to Reuters.

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Under a law passed by the US Government earlier this year, auto manufacturers are required to source battery minerals from countries with free trade agreements to gain eligibility for consumer EV tax credits.

GM’s investment will be used to fund the development of QPM’s proposed Townsville Energy Chemicals Hub (TECH) project in Northern Australia.

As part of the investment agreement, GM will invest up to $69m in QPM, with an initial investment of up to $25m followed by a final investment decision (FID) investment worth up to $44m.

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Under the offtake agreement, GM holds the right to buy all the uncommitted nickel and cobalt sulphate produced from the first phase of the TECH project in its first 15 years of production.

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GM global purchasing and supply chain vice-president Jeff Morrison said: “The collaboration with Queensland Pacific Metals will provide GM with a secure, cost-competitive and long-term supply of nickel and cobalt from a free-trade agreement partner to help support our fast-growing EV production needs.

“This new collaboration builds on those commitments as we look to secure supply through the end of the decade, while also helping continue to expand the EV market.”

By the end of 2025, GM aims to have one million units of annual EV capacity in North America.

QPM CEO Stephen Grocott said: “GM’s investment in our company and the associated offtake brings us one step closer towards construction of the TECH Project, where we will one day aim to deliver the world’s cleanest produced nickel and cobalt.”