AMN - MADAGASCAR: Collaboration on battery anode plant

NextSource Materials has executed a Letter of Agreement (LOI) with its Japanese offtake partner and a leading Chinese processor of graphite anode material to collaborate on the construction of a value-add, battery anode plant in a jurisdiction near the company’s Molo Graphite Project in southern Madagascar.

To protect certain confidential aspects of the LOI, the Japanese trading company and the Chinese SPG producer have requested not to be identified at this time.

The LOI is for the purpose of collaborating on the construction and operation of the proposed SPG facility. As well as being in a jurisdiction proximal to the Molo project, the proposed facility would be strategically located to key demand markets for graphite anode material.

In October 2018 the company signed a 10-year offtake agreement with a prominent Japanese trading company to purchase 20,000 tonnes per annum of Molo SuperFlake® graphite for use in battery anode applications for electric and hybrid vehicles.

NextSource’s Japanese partner is a major supplier of spheronised and purified graphite (SPG) for anode material in lithium-ion batteries (LiB) for electric vehicle (EV) and hybrid vehicle (HEV) applications. Its EV and HEV automotive anode customers are global and currently supply graphite anode material to the majority of Japanese automotive OEMs.

Since 2018, NextSource and its Japanese partner have been in discussions regarding potential supply chain collaboration to supply value-added graphite material using SuperFlake® graphite concentrate.

The Chinese partner is one of the top processors of SPG for the EV and HEV markets and has verified that NextSource’s SuperFlake® graphite concentrate meets or exceeds all quality requirements for SPG material for EV and HEV automotive applications.

Its EV and HEV anode customers are global, including the North American market and its interest in the partnership with NextSource and its Japanese partner is to have an additional SPG facility located outside of China and close to a high-quality mine source of flake graphite to supply international automotive OEM customers.

NextSource president and CEO Craig Scherba said: “The execution of this LOI is part of NextSource’s downstream growth plan and brings together one of the best global processors of graphite anode material and one of the most prominent suppliers of graphite anode material to automotive OEMs globally.

"This Letter of Agreement to partnership on a SPG plant with such established partners positions NextSource to be a significant and dominant future supplier of high-quality flake graphite to major battery anode customers globally and simultaneously gaining an immediate foothold into the high-growth markets for EVs, as well as the burgeoning energy storage market that will be reliant on graphite anode material.”

Molo ranks as one of the largest-known and highest quality flake graphite deposits in the world and is the only project with SuperFlake® graphite.

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