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The company is ramping up production at the facility to its nameplate capacity of 17,000 tonnes per year or 30 tonnes per hour soon.
“For our next milestone, we are working very diligently to make our first shipment of SuperFlake® graphite to our Japanese offtake partner to produce coated spherical purified graphite for a strategic Japanese company in the OEM supply chain that has asked for multi-tonne qualifying samples, and we expect to ship that by the end of July,” Nykoliation told Fastmarkets recently.
Subsequently, the company plans to a meet a request for a 1,500 tonne shipment to a second strategic Japanese company in the vehicle original equipment manufacturer (OEM) supply chain for a battery cell test.
“It is a major accomplishment to be this advanced in the verification process where we can supply large run-of mill quantities for testing,” Nykoliation said.
Around 33% of the power required for the Molo mine, camp and accommodation will come from its 2.6 megawatt solar farm. And NextSource plans to expand that share to 50-60% over time and in lockstep with the expansion of the mine.
Construction at the solar plant has been completed and final electrical interconnections with the mine are now being established, the company reported on July 12.
NextSource believes the relatively small scale and reliability of its flake graphite supply gives it an advantage in moving quickly to market at a relatively low cost.
“[Although] that is a relatively small plant, it has allowed us to fund it, build it and commission it in a short period of time,” Nykoliation said. “As we expand, we will utilize our all-modular approach and replicate our existing plant to rapidly expand capacity at the mine in Madagascar.”
“We can replicate our 17,000 tpy plant for around $20 million and reach commissioning in just 12 months from funding,” he added.
The company plans to become a vertically integrated operation using flake feedstock from Molo at a battery anode facility in Mauritius, which it expects to commission in 2024.
“We know it is important to the end customers – be that a cell manufacturer, an OEM or anode processor – that you have your own mine source for security of supply and to remain competitive on price,” Nykoliation said.
This consistent source of feedstock supply is important in the verification process for OEMs, the executive told Fastmarkets.
“For Japanese OEMs and cell producers in particular, if a battery material supplier changes one of the ‘4 M points’ – manpower, machine, materials or management – then you must redo their quality approval process, which can be lengthy, before your product is verified again,” Nykoliation said.
NextSource’s battery anode facility (BAF) in Mauritius is planned to start with an initial production line of 3,600 tonnes.
“The BAF facility in Mauritius will allow us to put in four lines of roughly 3,600 tonnes each in future, so that will be a 14,400-tonnes facility,” Nykoliation said.
Molo’s graphite flake is large, which demands a price premium on the spot market over the fine flake most commonly used in battery anode.
Fastmarkets weekly price assessment for graphite flake 94% C, +80 mesh, fob China was $1,077-1,100 per tonne on July 20, while the fine graphite flake 94% C, -100 mesh, fob China stood at $548-620 per tonne on the same day.
The purification and spheronization process required to produce uncoated spherical graphite provides substantial added value to this material.
Fastmarkets’ assessed the graphite spherical 99.95% C, 15 microns, fob China at $2,000-2,200 per tonne on July 20.
This material is uncoated, which is the penultimate stage before the production of coated spherical graphite (CSPG) used in battery anodes.
Natural graphite prices have been under pressure over the past year due to the increased availability of synthetic graphite, which has fallen in price. This has led Fastmarkets to start to price synthetic graphite feedstock.
NextSource is also developing its own synthetic graphite anode facility drawing on renewable energy in various jurisdictions to complement BAFs.
“Most EV anodes in cars outside of China are a combination of both natural and synthetic, while some cell manufacturers and OEMs will be starting with 100% synthetic anode because of the lack of natural graphite projects,” Nykoliation said.
“Our strategy is to be able to be a one-stop shop for all parts of the anode. With our Japanese technical partner, we already have the advantage that they already have supply chain connections into artificial graphite as well as natural,” he added.
NextSource believes natural graphite could become more attractive to market participants if new anode processing technologies were able to lengthen its life cycle and equate it to that of synthetic material.
“If that [technology is developed], then there is an even stronger case for OEMs to consider all flake-based anodes that would be cheaper to make than synthetic [and] would have a much lower carbon footprint and comparable cycle life,” Nykoliation said.
There is a shortage of natural and synthetic graphite produced outside of China that meets the eligibility of the US Inflation Reduction Act (IRA) legislation that grants generous electric vehicle (EV) subsidies
“The IRA guidelines currently dictate that despite the fact that there is an overcapacity of material, no battery raw material can come from ‘countries of foreign concern’ or be processed in a non-FTA [free trade agreement] approved country,” said Nykoliation. “Either means you are not eligible for the $7,500 EV subsidy under the IRA.”
The current reliance on synthetic graphite from China by graphite consumers cannot be continued indefinitely under the IRA system, according to him.
“This is not viable or sustainable because by 2025 or 2026 you can’t have any of the synthetic graphite coming from China,” Nykoliation said.
As a result, OEMs need to find alternative sources of battery materials, which will likely be traded at a premium to material from China. And this means demand is expected to increase along the supply chain for anode material not sourced from China.
“Every car company is concerned about the anode supply chain, so we have lots of interest now in sourcing the flake feedstock needed for CSPG,” Nykoliation said. “Those projects that can viably demonstrate they can be a fully integrated solution to the OEMs will be favored versus those that cannot.”
Securing funding for emerging projects is not easy in the current economy, however.
NextSource plans to raise approximately C$50 million ($37.8 million) in a public offering of common shares around August 1, it said on July 12. Vision Blue Resources will participate in the offering to maintain its pro rata ownership in the company.
“We need more projects to come online but we are not seeing that in the equity markets to get them online, which is causing more angst in the boardrooms of the OEMs,” Nykoliation said. “So, this could spur on the OEMs to become more active in order to secure their own supply chains.”
NextSource’s own approach to flake and CSPG production is to limit costs by keeping the scale of their individual modules relatively small and using repeatable modules.
The BAF planned in Mauritius has a projected CSPG capacity of 3,600 tpy and capital cost of US$ 32 million with a build time of just 12 months.
“We believe that is a capital cost that investors would be interested in assist us with when the time comes,” Nykoliation said. “By starting small, we de-risk the project,” he added.
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