SOUTH Africa is one of the jurisdictions being considered for the construction of a factory producing battery materials used by electric vehicle (EV) manufacturers such as Tesla.
NextSource, a company in which South African mining entrepreneur Mick Davis is invested, said it had signed a binding agreement between a Japanese offtake partner and its Chinese partner to build a facility producing battery anodes (BAF).
The BAF will produce spheronized and purified graphite (SPG) required in lithium-ion batteries for EV and hybrid vehicle applications (HEV). The BAF is a replica of facilities that Tesla, the US electric vehicle maker, uses in its supply chain, said NextSource.
Davis, who is chairman of NextSource, took a $29.5m stake in the company through his Vision Blue Resources (VBR), established by him to invest in the electrification of the drive-train. NextSource controls the Molo Project in southern Madagascar. The project is billed as “… one of the largest known and highest quality deposits” of flake graphite globally.
In addition to South Africa, the BAF could also be built at a site in Europe or North America with commissioning expected to be in the fourth quarter of 2022.
“This collaboration is part of NextSource’s downstream growth plan and partners the company with prominent and established processors and suppliers of graphite anode material to the Tesla supply chain and other global automotive OEMs [original equipment manufacturers,” said Davis in a statement on Monday evening.
The Japanese partner, which is unnamed, is described as “… a prominent Japanese trading company” that supplies SPG for anode material in lithium-ion batteries for EV, and HEV applications. It will open up access it has to OEMs and act as a marketing and sales agent to NextSource.
The Chinese partner – which has long worked with the Japanese company – will be the technical partner. It will take a 3% licensing fee based on the total annual sales value of anode material sold whilst the Japanese partner will receive a 5% sales commission based on the total annual sales value of anode material sold.
Said Davis: “NextSource is well-positioned to be a significant strategic supplier of high-quality flake graphite to major battery anode customers globally”. The partnership would also give NextSource “an immediate foothold” in the EV market,” he said.
Davis said in February that demand for battery metals would “… dwarf anything the mining industry has ever seen before, including the commodity impact of China’s industrialisation in the last 20 years”.