Australian mine developer Clean Teq said on Tuesday it was looking to sell a stake in its nickel, cobalt and scandium project in central New South Wales, as it seeks a cornerstone partner to help fund development.

The company has tasked Macquarie Capital to run a process to find a partner to buy up to 50% in the Sunrise Battery Materials Complex, in combination with long-term offtake, it said in a statement.

“We would be open to more than one partner. It’s possible that it could be a consortium ” Chief Financial Officer Ben Stockdale told Reuters.

Clean Teq expects to finish the process in the second half of this year, with a final investment decision due to be made in the fourth quarter.

Due to underinvestment in the mining sector, dominant EV maker Tesla Inc said last month it expects global shortages of electric-vehicle battery minerals down the road

Asian battery makers have been turning to early-stage cobalt projects in Australia and Canada to lock in supplies of the critical battery ingredient ahead of expected shortages as demand for electric vehicles revs up.

But many have stopped short of investing, as buzz over a demand boom dissipates given the uncertain timeline for electric vehicle uptake and subsequent price risk of chemicals like cobalt and nickel sulphate.

Due to underinvestment in the mining sector, dominant EV maker Tesla Inc said last month it expects global shortages of electric-vehicle battery minerals down the road.

Peer Australian Mines is still trying to secure finance for its A$1.3 billion ($935 million) battery materials plant, although it expects to have tied that up by end-June.

Clean Teq’s market value has tumbled by four fifths to A$242 million ($169 million) from more than $A1.1 billion early last year, partly as cobalt prices collapsed and also after it announced a more expensive build cost for a planned high pressure acid leach (HPAL) plant at the Sunrise complex.

Notoriously problematic HPAL plants have made financiers wary about funding, but recent technology developed by Metallurgical Corp of China (MCC), a unit of China’s Minmetals, appears to be working more reliably.

Clean Teq, which signed a development deal with MCC last August, is now looking at paring its costs, by prebuilding modules in China and shipping them across, Stockdale said.

Its mandated lead arrangers, China’s ICBC, Australia’s NAB, Societe Generale and Natixis are putting together a debt financing package.

In 2017, China’s Beijing Easpring Material Technology Co Ltd which makes products for battery makers, signed a binding five-year deal with Clean Teq.

($1 = 1.4353 Australian dollars)

(By Melanie Burton and Aditya Soni; Editing by Richard Pullin)

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