NextSource Materials (TSX:NEXT) has secured US$30 million ($42.7 million) in investment from Japanese firms to fund its planned battery anode facility in the United Arab Emirates.
Under a binding agreement, Japanese trading company Hanwa and the Japan Organization for Metals and Energy Security (JOGMEC) will provide the funding in exchange for a combined 15% interest in the facility.
The two firms will hold their interest through a jointly owned investment vehicle, NextSource says, adding that it will retain an 85% stake.
“The finalisation of the Hanwa and JOGMEC investment in the UAE battery anode facility marks a significant milestone for NextSource,” NextSource CEO Hanré Rossouw says.
The company made its final investment decision on the facility in May and plans to advance the project through staged funding.
The Japanese investment will go towards capital expenditure for the first phase of the project, which NextSource describes as “a strategic, independent source of battery anode materials and an alternative to existing supply chains”.
Global anode strategy
Located in the industrial city of Abu Dhabi, the facility is one of a series of battery anode plants NextSource has planned across markets in Asia, North America, and Europe.
Each plant is expected to use a processing technology exclusively licensed to NextSource that is currently used to produce spheronised, purified graphite (SPG) for major anode and battery cell producers, the company says.
The facilities will process flake graphite sourced from NextSource’s Molo mine in Madagascar, as well as potential third-party feedstock.
Molo, which the company describes as one of the world’s largest graphite deposits, is currently in its first phase of production, with the capacity to produce 11,000 tonnes of its trademarked graphite concentrate annually.
According to NextSource, its Abu Dhabi facility is advancing through the pre-EPC (engineering, procurement, and construction) mobilisation phase. Work to date includes property agreements and early-works contracts.
The company says it is also in discussions with additional investors regarding a further 35% interest in the project.
Write to Jackson Chen at Mining.com.au
Main Image: NextSource Materials
