Caterpillar & Mining Company NMG Make Amazing Circular Deal
When one person has something another needs, and that other person has something the first person needs, it makes sense to trade. Today, we learned how a manufacturer of heavy equipment, used in mining, is working toward a zero-emission future where batteries are needed. A mining company, on the other hand, is obtaining some of the battery minerals that the equipment manufacturer needs. So, it made a lot of sense for these companies to scratch each other’s backs.
Nouveau Monde Graphite Inc. (NMG) and Caterpillar Inc. have signed definitive agreements to provide a zero-exhaust emission fleet, supporting infrastructure, and service for NMG’s Matawinie Mine. Caterpillar will supply heavy mining equipment to transition from traditional models to Cat zero-exhaust emission machines. Additionally, a non-binding memorandum of understanding (MoU) has been signed between the two companies to advance commercial discussions targeting NMG’s active anode material. This offtake MoU could establish a full circular value chain whereby NMG supplies carbon-neutral graphite materials to Caterpillar for the development of its sustainable battery supply chain to electrify heavy vehicles, including NMG’s Matawinie fleet.
“Caterpillar is providing NMG with a comprehensive solution for the Company’s Matawinie Mine, de-risking the adoption of new technologies, and optimizing operational excellence through integrated infrastructure,” said Arne H Frandsen, Chair of NMG. “At every stage of development, management has worked to expand the field of possibilities for sustainability in our sector. And now, our new commercial relationship for NMG’s battery materials further elevates the impact of our collaboration with Caterpillar and the relevance of NMG’s business strategy. Today, we raise the bar again!”
The Roadmap
Caterpillar and NMG have planned the development and testing of equipment and infrastructure for the Matawinie Mine in Saint-Michel-des-Saints, Québec, Canada. During the pre-production phase and early production years, the equipment used for commercial production will support operations and be gradually replaced with Cat® zero-exhaust emission machines as they become available.
“I’m proud of the collaboration and work the NMG and Caterpillar teams have accomplished together in support of the Matawinie site,” said Denise Johnson, Caterpillar Group President. “This project is an exciting one as it highlights what is possible when an effective energy transition roadmap is implemented that bridges the traditional product line to an integrated, electrified site of the future.”
In order to achieve a full, all-electric transition by year 5 of Matawinie commercial operations, technical teams will closely collaborate to test Caterpillar’s Early Learner models and pilot units and support technology development. NMG plans to use these machines in mining operations and gather data from on-site utilization in various weather, terrain, and operational conditions. Feedback from NMG’s mining operations will help further the development of electrified machines and sites.
Caterpillar will reserve production slots based on the commercialization of Cat zero-exhaust emission machines, which allows the company to benefit from timely deliveries and technology enhancements throughout the contract duration. The agreements include various machines, such as hydraulic excavators, mining trucks, wheel loaders, dozers, and motor graders, as well as charging and energy storage infrastructure and equipment maintenance services.
NMG and Caterpillar’s Job Site Solutions have agreed on a unique solution to reduce the initial capital intensity for the Matawinie Mine. The solution offers access to equipment via an hourly fee based on usage and includes asset management support for improved uptime, predictability, and efficiency. Caterpillar, along with authorized Cat dealer Toromont Industries Ltd., will oversee the maintenance and repair strategy for the equipment to maximize machine availability. NMG also has the option to lease or purchase machines through Toromont if desired.
There has been significant progress in electrification across heavy-industry sectors in recent years, backed by active innovation and strong decarbonization commitments (International Energy Agency, May 2022). In fact, Caterpillar revealed their first prototype of a battery-powered large mining truck in 2022, showcasing the latest technology advancements and the extent of electric solutions by operating fully loaded to its rated capacity. Through this next stage of collaboration, Caterpillar plans to support NMG in advancing the company’s net zero objectives.
What NMG Is Giving For These Production Slots
The offtake MoU between NMG and Caterpillar focuses on NMG’s active anode material, which will be produced at the company’s Matawinie Mine and Bécancour Battery Material Plant.
“A secure, resilient, and sustainable supply of battery materials is critical to actualizing the opportunities that electrification represents for our customers,” said Rod Shurman, Caterpillar Senior Vice President with responsibility for the Electrification and Advanced Power Solutions Division. “This collaboration with NMG is an example of how Caterpillar is intentionally building out our value chain to support our customers’ sustainability objectives and further establish our role in the global energy transition.”
NMG’s solutions aim to create fully integrated and electrified production of natural graphite, from ore to battery materials, while prioritizing environmental impact. Their recent life cycle assessment confirmed an industry-leading environmental footprint. NMG plans for all-electric operations powered by renewable energy combined with clean processing technologies to create advanced materials with an exceptionally low climate change impact, in line with global decarbonization efforts.
“Not only will we benefit from Caterpillar’s stellar expertise, renowned products, and latest technological developments, but our team will also be at the forefront of the electric revolution in the sector, sharing insight, testing equipment for further optimization, and providing battery materials to support electrification beyond our mine,” said Eric Desaulniers, Founder, President, and CEO of NMG. “This collaboration truly reflects our vision for leadership and unified efforts to advance responsible mining practices and global decarbonization. I salute the commitment of Denise and Caterpillar’s team, without which our ambition would not have materialized so efficiently.”
We’ll Probably Start Seeing More Deals Like This
While it would be nice to wave a magic wand and provide everybody with the electric vehicles and equipment they need for everything, the real world doesn’t work like that. Mining materials and preparing the industry to make all of the equipment is going to take time, so some people will get their zero-emission equipment before others.
So, we’re going to start seeing a lot of players in the industry try to jump the line in any way they can by leveraging things they can contribute. Expect to see a lot more of this as other companies figure this out.
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