Northern Graphite (NGC.V), opens new tab said on Wednesday it signed a preliminary agreement with Saudi Arabian investment firm Al Obeikan Group to jointly develop and operate a large-scale battery anode material facility in the kingdom.
The Canadian miner said the roughly $200 million facility would have an initial annual capacity of 25,000 tonnes, with debt financing sourced from Saudi government finance agencies and global commercial banks.
Northern Graphite shares surged about 30% to C$0.32 in morning trade.
WHY IT'S IMPORTANT
The demand for graphite anodes has soared as companies race to secure supplies of battery materials used in electric vehicles amid a global push towards cleaner transportation and fuel.
Northern Graphite said the facility would be scalable over time to meet the rapidly growing global demand for graphite anode materials sourced outside of China.
CONTEXT
Countries, including the United States, are ramping up efforts to reduce dependence on China, which is the top producer of graphite.
Saudi Arabia is also looking to diversify its economy away from oil dependence by expanding into new industries, and positioning the country as a global investment and tourism hub.
BY THE NUMBERS
BY THE NUMBERS
Al Obeikan would own 51% of the joint venture company while Northern would hold the rest.
The Canadian miner said it expects to start construction of the facility this year with first-phase production beginning in 2028.
Northern added it was in advanced discussions with global battery manufacturers for a long-term offtake agreement for the initial 25,000 tonnes of production.
The company also said the JV project would buy up to 50,000 tonnes per annum of graphite from Northern's Namibia project and would fast-track the restart and expansion of the Okanjande mine in the African nation.
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