OTTAWA — One of the biggest names in batteries is lending some charge to Canada’s efforts to sell more critical minerals to Japan. 

As officials from the two countries met in Ottawa Thursday and signed agreements to start cooperating more closely in the battery business and on artificial intelligence, advanced manufacturing, clean tech and life sciences, Panasonic signalled it’s closing in on a deal to buy cell components from a company in the emerging EV hotspot of Bécancour, Que.

The deal: Nouveau Monde Graphite (NMG) announced last October that it was working on an agreement to supply anode materials to Panasonic Energy. The Montreal-based company plans to mine graphite in Matawinie, then refine it in Bécancour. On Thursday, the two firms announced they’ve been testing NMG’s material in Panasonic’s prototypes, a step towards a deal where the latter would buy a significant share of the former’s output.

“We are now trying to expand our business for EV batteries,” Panasonic Energy CEO Kazuo Tadanobu said at the signing ceremony in Ottawa Thursday. The firm is building a cell plant in Kansas, joining an existing facility in Nevada. A deal with NMG would give Panasonic a key link in the supply chain for those factories. “We are going to make our supply chain more resilient,” he said, citing opportunities to produce locally and further develop the technology. “We are able to produce battery materials with low carbon footprint [in] North America.”

NMG declined to provide more details about the agreement signed Thursday, citing commercial confidentiality.

The bigger picture: Thursday’s event drew three high-profile Canadian cabinet ministers—Innovation Minister François-Philippe Champagne, Trade Minister Mary Ng and Natural Resources Minister Jonathan Wilkinson. Japanese Trade Minister Yasutoshi Nishimura’s visit gave Ottawa a chance to showcase progress on the trade file with Japan despite setbacks elsewhere. And the Panasonic-NMG tie-up provides a useful example of what bilateral critical minerals cooperation could look like.

“The clock for strategic cooperation between Japan and Canada has started ticking,” said Nishimura. One reason Japan and Canada struck the agreements, Nishimura said, was the geopolitical instability created in part by “attempts by some nations to weaponize economic interdependence in the form of coercion for diplomatic and security purposes.” Japan still imports the bulk of the critical minerals it uses from China, but has signed agreements with the likes of the U.S. and the U.K. to diversify its sources. 

“Canada has an abundance of battery metal and renewable energies, and has good access to the North American market,” said Nishimura, calling it “one of the most important countries” for Japanese cell companies.

Wilkinson said the two governments will now work on “a very concrete action plan” for critical minerals, but that companies on both sides are already exploring opportunities. “There is interest on the part of the Japanese in actually looking at manufacturing of batteries in Canada,” he told reporters.

Boldfaced names: Japanese auto giant Toyota has recently accelerated its EV ambitions in response to pressure from investors. The firm assembles hundreds of thousands of vehicles in Canada, but its green plant overhauls here have focused on hybrids. Unlike number two Volkswagen and smaller rivals Stellantis and GM, the world’s largest carmaker has not announced a significant Canadian EV supply-chain investment. 

“We’ve been engaging with Toyota,” Champagne told reporters, noting that “different manufacturers have gone at different speed when it comes to the adoption of different technology.” Conversations with battery makers are also continuing, he said, citing Panasonic’s presence at the Ottawa announcement, although he would not say whether another deal was imminent.