NextSource Materials achieves production of first SuperFlake graphite from Molo mine
NextSource Materials Inc. has achieved the first production of SuperFlake graphite concentrate at its Molo mine in Madagascar. This accomplishment is considered a significant milestone for the company and is attributed to the hard work and dedication of its commissioning and operations teams, employees, contractors, as well as the support received from the local community and government.
SuperFlake graphite is a high-quality graphite and anode material that is in high demand for use in lithium-ion batteries, especially as the demand for such batteries in electric vehicles (EVs) is rapidly increasing. NextSource Materials aims to become a sustainable global producer of high-quality graphite and anode material, positioning itself favorably in the growing market.
During the commissioning and optimization process of the processing plant, the focus was initially on producing coarse flake concentrate. The first tonne of production consisted of plus-48 mesh (jumbo size) SuperFlake graphite. Since the commencement of plant commissioning in March 2023, the commissioning and operations teams have been steadily progressing through debottlenecking and optimization activities. The next phase will involve ramping up the plant throughput to its full nameplate capacity of 17,000 tonnes per annum.
Offtake agreements
NextSource Materials has existing offtake agreements with key customers, including thyssenkrupp Materials Trading GmbH from Germany and a Japanese technical partner. The Japanese partner supplies value-added graphite to Japan’s largest anode processor, which in turn serves multiple Japanese and international OEMs (original equipment manufacturers) with graphite anode material. The company expects to sell all the flake graphite produced at the Molo mine to these key customers.
Additionally, NextSource Materials is engaged in advanced discussions with several major EV companies (OEMs) and has received requests for multitonne samples of battery anode material as part of the qualification process. To meet these demands, the company plans to send flake graphite qualifying material to its battery anode facility (BAF) technical partners. The BAFs are value-added processing facilities that convert flake graphite into coated, spheronized, purified graphite (CSPG), the final form of anode material used in lithium-ion batteries for EV applications.
NextSource Materials announced its strategy for the staged buildout of a series of BAFs in key locations. The first BAF will be established in Mauritius due to its proximity to the Molo graphite mine in Madagascar and its strategic shipping routes to Asian markets. The company has already signed a long-term industrial lease to build the Mauritius BAF within an existing industrial facility in Port Louis. The location is advantageous, as it falls under the classification of an industrial freeport, benefiting from a low corporate tax rate and zero value-added tax (VAT).
A technical study conducted for the Mauritius BAF, with an initial production capacity of 3,600 tonnes per annum (Line 1) of CSPG, estimated the initial capital costs and working capital investments at US$32.8 million. The study projected annual revenues of US$33.7 million and an EBITDA of US$13.2 million. The economic analysis demonstrated promising results, with a net present value (NPV) of US$106.9 million, an internal rate of return (IRR) of 42.7%, and a payback period of 2.2 years.
NextSource Materials plans to expand the Mauritius BAF by adding three additional lines (lines 2, 3, and 4), ultimately reaching a total capacity of 14,400 tonnes per annum of CSPG. The overall post-tax NPV (8% discount) for this expanded capacity was estimated at US$439.7 million, with incremental capital expenditures of US$74 million and an IRR of 45.8%.
