Less than a week after reporting it would need an additional $375 million to complete construction at its flagship Whabouchi lithium project, Nemaska Lithium cancelled its multi-year supply contract with Livent Corporation – a move that will cost it at least US$10 million.

The contract would have supplied lithium technology company Livent with 8,000 tonnes of lithium carbonate per year (or a total of 28,000 tonnes over the life of the contract) and was set to begin on April 1.

Nemaska said it will return a US$10-million payment it received from Livent in April 2017, when the companies renegotiated the supply contract schedule, as well as a termination fee of a similar amount.

Livent, which in a statement disputed Nemaska’s assertion that it had a contractual right to cancel the contract, filed for arbitration in June 2018, but that the two parties suspended the process to continue negotiating a new start date for Nemaska to supply lithium.

Nemaska said that throughout the discussions it advised Livent it might “have no option but to terminate” the agreement. “Despite good faith negotiations, the Corporation was unable to reach a mutually satisfactory outcome with Livent,” it said in a statement.

Related: Nemaska Lithium wins PDAC's 2019 Viola R. MacMillan Award for Whabouchi

Livent said it has filed for a new round of arbitration and “intends to vigorously pursue its claims.”

Nemaska has other commercial agreements with LG Chem, Johnson Matthey and Northvolt.

While the funding announcement on Feb. 13 caused the company’s stock to plunge, to $0.30/share on the TSX from $0.55/share previously, it has not taken a further hit.

As of Dec. 31, Nemaska had spent $138.4 million on developing Whabouchi, and an additional $67.3 million for its Shawinigan electrochemical plant. In a statement last week, CEO Guy Bourassa said the need for additional funds is based on finalized agreements and work bids rather than the estimates in its NI 43-101.

“We now have a better understanding on the remaining scope of the project, estimated budget and current market conditions,” he said.