Nextsource Materials (TSX: Next, OTCQB: NSRCF) announced that it has signed a multi -year Offtake agreement with Mitsubishi Chemical Corporation (MCC), making the bid to become a vertically integrated graphite supplier for the North American Electric Vehicle (EV) market.
According to the agreement, Nextsource supplies approximately 9,000 tons per year from intermediary Anode Active Material (AAM) to the MCC factory in Japan.
MCC, the largest chemical company in Japan and an important supplier of large car manufacturers, will refine the material in the completed AAM for EV battery production in North America.
“We are delighted to have entered into a partnership with Mitsubishi Chemical Corporation through a binding purchase agreement for the production of active anodia material in the middle -east,” said Hanré RossouwPresident and CEO of Nextsource.
The timing is also strategic. The company is rapid development of a large-scale battery anode facility (BAF) in the United Arab Emirates to process its patented Superflake graphite concentrate from the Molo mine in Madagascar.
The facility will serve as the production hub for the MCC agreement, with the initial shipments expected after a rigorous qualification process in 2026. The company said that the installations of equipment are already underway and that a complete disaster is aimed at 2027.
In addition to processing and logistics, Nextsource is preparing for a phase 2 extension of the molo -my to guarantee sufficient graphite feed material. The project, which started this year with phase 1 activities this year, is one of the graphite deposits of the highest quality in the world and the only thing that, according to the company, produces Superflake-graphite.
Nextsource says that the long-term goal is to offer a fully traceable, scalable and China-independent source of anodia material for battery quality ancodes.
The company is also in advanced discussions with strategic financing partners to finance the construction of the BAF and MOLO expansion. Technical and economic studies are underway to determine capital requirements and investment stiming.
The agreement also comes in the midst of tightening restrictions on Chinese battery materials. In July, the US Department of Trade imposed an anti-dumping obligation of 93.5 percent on the import of graphite of anodal quality from China, which contributes to existing counter vailing rates for a combined effective percentage of approximately 160 percent.
The decision, partly inspired by complaints from the American active anodia material producers (AAAMP), is designed to protect domestic producers against what they describe as unfair priced Chinese shipments.
The decision could reform the graphite market, which has long been dominated by China, which is currently responsible for around 95 percent of the global anode output. The import from China was two -thirds of the 180,000 tons of graphite that was sent to the US in 2023.
In general there is also a growing urgency among participants of the EV -Supply Chain to turn away from China.
Although materials such as lithium and cobalt have recorded more newspaper heads, graphite, which makes more than 95 percent of the anode side of an EV battery, is just as critical, good for no less than 50 kilograms per vehicle.
With the new rates, industrial analysts expect a significant acceleration of non-Chinese supply chain development, in particular for American car manufacturers under pressure to secure conforming sources.
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Publication of securities: I, Giann Liguid, has no direct investment interest in a company mentioned in this article.
Editorial disclosure: Nextsource Materials is a customer of the Investing News Network. This article is not paid for content.
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