American company NextSource signs a graphite deal with Mitsubishi, amidst the US strengthening its control over the sector
China, currently responsible for nearly 95% of global anode output, could see its market position reshaped following a significant decision. The American Active Anode Material Producers (AAAMP) have filed complaints that led to the imposition of a 93.5% anti-dumping duty on anode-grade graphite imports from China. This decision is aimed at shielding domestic producers from what they describe as unfairly priced Chinese shipments.
The urgency to diversify the graphite supply chain, beyond China, is gaining momentum in the EV industry. Imports from China made up two-thirds of the 180,000 metric tons of graphite shipped to the US in 2023. With the new tariffs in place, industry analysts expect a significant acceleration of non-Chinese supply chain development, particularly for US automakers under pressure to secure compliant sources.
In a move that could potentially stimulate the growth of non-Chinese graphite producers, NextSource Materials has signed a multi-year offtake agreement with Mitsubishi Chemical Corporation (MCC). Under the terms of the agreement, NextSource will supply approximately 9,000 metric tons per year of intermediate anode active material (AAM) to MCC's facilities in Japan.
The graphite will come from NextSource's Molo mine in Madagascar, known for its high-quality SuperFlake graphite concentrate. The intermediate AAM will be refined by MCC into finished AAM for use in electric vehicle (EV) battery manufacturing. The final product will be supplied to a major automotive original equipment manufacturer (OEM) in North America.
As part of this agreement, NextSource is developing a large-scale Battery Anode Facility (BAF) in the United Arab Emirates, to meet the required volume capacities for MCC. Equipment installations are already underway, and a full-scale ramp-up is targeted for 2027. The facility will serve as the production hub for the MCC agreement, with initial shipments expected following a qualification process in 2026.
Hanré Rossouw, President and CEO of NextSource, expressed his excitement about the partnership, stating, "This agreement positions NextSource as a significant vertically integrated graphite supplier outside of China, crucial in the context of the global EV market."
The deal positions NextSource as a significant player in the global EV market, offering a fully traceable, scalable, and China-independent source of battery-grade anode material. The company aims to deliver sustainable, high-performance anode materials globally, supporting electrification efforts through this partnership.
The strategic impact of this deal is significant. It positions NextSource as a key player in the global EV market, outside of China, and reflects the growing urgency among EV supply chain participants to pivot away from China. The announcement led to a significant increase in NextSource's stock price, reflecting the strategic importance of the partnership.
With this partnership, NextSource is well-positioned to meet the growing demand for non-Chinese, high-quality graphite in the EV industry. The company is fast-tracking development of its large-scale Battery Anode Facility (BAF) in the United Arab Emirates, setting the stage for a potential shift in the global graphite market.
The strategic move by NextSource Materials, partnering with Mitsubishi Chemical Corporation, signifies a significant entry into the global finance sector, as it aims to raise funds for the development of its large-scale Battery Anode Facility. The partnership's emphasis on high-quality, China-independent graphite production aligns with the financial interests of stakeholders in the technology sector, particularly those in the fast-growing EV industry.
With the strategic impact of this deal, NextSource is not only positioning itself as a key player in the global EV market, outside of China, but also demonstrating a commitment to finance, technology, and sustainability, which are critical elements in the modern EV industry's growth and success.
