- NextSource Materials (TSX:NEXT) signed a letter of intent with Hanwa Co. and the Japan Organization for Metals and Energy Security to consider an up to US$30 million investment in the company’s proposed battery anode facility in Abu Dhabi
- NextSource is a Toronto-based battery materials company focused on vertically integrated production
- NextSource stock has given back 30.56 per cent year-over-year and 65.52 per cent since 2021
NextSource Materials (TSX:NEXT) signed a letter of intent with Hanwa Co., a top Japanese metals, oil and chemicals trading company, as well as the Japan Organization for Metals and Energy Security (JOGMEC), a Japanese government agency, to consider an up to US$30 million investment in the company’s proposed battery anode facility in Abu Dhabi.
Hanwa and JOGMEC would make a phased investment through a jointly-owned vehicle, representing an up to 15 per cent equity stake in the project, with eyes on diversifying Japan’s battery supply chain and reinforcing national security.
The facility, designed by Stantec, will have an initial production capacity of 14,000 tons of natural graphite anode material per year, with staged developed planned to increase output to 30,000 tons over time.
The letter of intent leaves room for Hanwa and JOGMEC to play larger roles in project development through offtake agreements, distribution, logistics and a potential supply agreement tied to NextSource’s Molo mine in Madagascar, which houses a measured resource of 23.6 million tons of graphite that ranks among the largest known and highest-quality resources globally.
Ongoing discussions towards a definitive agreement will occur under an exclusivity period ending on March 31, 2026. Concurrently, NextSource is advancing towards a final investment decision on its facility expected by the end of Q1 2026, as well as renegotiating a previously announced offtake agreement with Mitsubishi – as detailed in Tuesday’s news release – which it expects to finalize over the next 45 days.
Management commentary
“We are excited to advance our discussions on strategic partnership with Hanwa and JOGMEC, two esteemed Japanese organizations with deep expertise in global battery materials and energy security, and global market access,” Hanré Rossouw, president and chief executive officer of NextSource Materials, said in a statement. “This LOI highlights the strategic value of our UAE BAF project in supporting Japan’s supply chain objectives and diversifying global anode production, and represents a potential cornerstone investment towards securing the project’s funding requirements.”
About NextSource Materials
NextSource Materials is a Toronto-based battery materials company focused on vertically integrated production.
NextSource Materials stock (TSX:NEXT) last traded at C$0.50. The stock has given back 30.56 per cent year-over-year and 65.52 per cent since 2021.
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