Samsung SDI to invest in Canada Nickel, new mine in Canada

Samsung SDI Co. has agreed to invest $18.5 million in Canada Nickel Company Inc. to secure steady supplies of nickel and cobalt, key materials for rechargeable batteries, the Canadian mine developer said on Friday.

Under the agreement, the South Korean battery maker will take an 8.7% stake in the company, alongside options to invest in its new flagship nickel mine.

Canada Nickel is planning to build a massive new nickel and cobalt mine in the Timmins-Cochrane mining camp in northeastern Ontario. It is raising funds for the construction, which is estimated to cost $2 billion.

Upon the final decision to build the mine, Samsung will have the right to purchase a 10% equity interest in Canada Nickel’s Crawford Nickel and Sulphide Project for $100.5 million.

Alongside the equity ownership in the project, it will also be granted the rights to 10% of the nickel and cobalt production from the mine over the life of the mine, Canada Nickel said in a statement.

Further, Samsung will have the rights to an additional 20% of the nickel and cobalt to be produced from the mine for 15 years, extendable by mutual agreement.

Crawford’s mine life is projected at 41 years once it enters production, Canada Nickel Chief Executive Mark Selby said in an interview with Canadian newspaper The Globe and Mail on Friday. 

Samsung is buying Canada Nickel’s shares at 1.57 Canadian dollars per share, around its market price.

With the investment, Samsung will become the Canadian mine developer’s third largest strategic investor after British mining giant Anglo American and Canadian gold miner Agnico Eagle Mines Ltd., according to Selby.

Canada Nickel is hoping to win permits by next year to begin the construction on the Crawford mine and plans to start production near the end of 2027.

It is looking for a buyer of the mine.

“With a growing list of strategic investors on board, the prospect of a buyout offer from one, or a combination of them, is a possibility,” Selby said in the interview.

Write to Jin-Won Kim at jin1@hankyung.com

Yeonhee Kim edited this article