US restricts graphite industry as NextSource agrees deal with Mitsubishi in the sector
In a significant move to diversify the electric vehicle (EV) battery supply chain, NextSource Materials has signed a multi-year offtake agreement with Mitsubishi Chemical Corporation (MCC). This partnership positions NextSource as a key non-Chinese supplier in the critical EV battery materials sector, facilitating supply chain security and growth for the North American electric vehicle industry.
The agreement sees NextSource providing about 9,000 tonnes per year of intermediate anode active material derived from its high-quality SuperFlake® graphite mined at the Molo project in Madagascar. This intermediate product will be shipped to MCC’s processing facilities in Japan for final refinement before being delivered to a major North American automotive OEM for EV battery production.
NextSource's strategy to vertically integrate graphite supply and processing outside of China, the dominant global player in battery materials, is further advanced by this deal. The company is prioritizing development of a large-scale Battery Anode Facility (BAF) in the United Arab Emirates, chosen for its strong infrastructure and strategic location near OEMs. This facility will serve as the production hub for the MCC agreement, with initial shipments expected following a rigorous qualification process in 2026.
The decision to impose tariffs on Chinese graphite imports, designed to shield domestic producers from what they describe as unfairly priced Chinese shipments, could reshape the graphite market. China, responsible for roughly 95 percent of global anode output, has long dominated the market. However, industry analysts expect a surge in the development of non-Chinese graphite supply chains due to the new tariffs.
The new tariffs could lead to a significant acceleration of non-Chinese supply chain development, particularly for US automakers under pressure to secure compliant sources. The American Active Anode Material Producers (AAAMP) have made complaints leading to the imposition of a 93.5 percent anti-dumping duty on anode-grade graphite imports from China, adding to existing countervailing tariffs for a combined effective rate of around 160 percent.
Hanré Rossouw, President and CEO of NextSource, expressed excitement about the partnership with MCC, stating, "We are proud to be at the forefront of this shift towards a more secure and diversified supply chain for North America’s growing EV sector."
The announcement drove a 27.1% stock price jump for NextSource, reflecting market recognition of the deal’s value and its potential to capture increasing demand for EV battery materials in North America. With the Phase 2 expansion of the Molo mine underway to ensure sufficient graphite feedstock, NextSource is well-positioned to meet the growing demand for non-Chinese graphite in the global EV market.
References:
- NextSource Materials Inc. (TSXV: NXT) Announces Multi-Year Offtake Agreement with Mitsubishi Chemical Corporation
- NextSource Materials to Build Large-Scale Battery Anode Facility in UAE
- NextSource Materials to Supply Mitsubishi Chemical with Graphite for EV Batteries
- U.S. Imposes Tariffs on Chinese Graphite Imports
- Graphite Market to Reshape Due to New Tariffs
- NextSource Materials' strategic move to partner with Mitsubishi Chemical Corporation in supplying 9,000 tonnes of intermediate anode active material for EV batteries signifies a significant step in diversifying the sector's supply chain outside Chinese dominance.
- The imposition of tariffs on Chinese graphite imports is expected to reshape the global graphite market, potentially leading to a surge in the development of non-Chinese graphite supply chains and a more secure and diversified supply chain for the electric vehicle sector in North America.
- With the announcement of a multi-year offtake agreement with Mitsubishi Chemical Corporation, NextSource Materials is poised to capitalize on the growing demand for EV battery materials in North America, amidst the anticipation of increased development of non-Chinese supply chains.
- NextSource Materials, with its ongoing Phase 2 expansion of the Molo mine and the construction of a Large-Scale Battery Anode Facility in the UAE, is well-positioned to meet the growing demand for non-Chinese graphite in the global EV market.
- Leveraging environmental-science and technological advancements, investments in businesses like NextSource Materials can contribute to personal-finance growth by capitalizing on the rising demand for energy-efficient and environmentally-friendly solutions, such as electric vehicles.
