NextSource stock jumps on lease agreement to build graphite plant in Mauritius

Staff Writer | April 10, 2024 | 1:08 pm Battery Metals Markets Africa Canada Graphite

NextSource applies to build graphite plant in Mauritius

Construction of the Molo graphite mine in Madagascar was completed in February 2023. (Image courtesy of NextSource Materials.)

NextSource Materials (TSX: NEXT) said on Wednesday it has signed a long-term lease agreement for a site in the Freeport Zone of Port-Louis to build its first battery anode facility (BAF) plant in Mauritius.

It has also integrated engineering improvements into the plant design and initiated the environmental permitting (EIA) process, the graphite miner said.

The news comes just days after NextSource submitted an application to build the facility to process graphite in the African island nation.

The plant will have capacity to produce 3,600 tonnes of battery-grade graphite a year, increasing to 14,400 tonnes after 2024, according to filings with the country’s government.

Set within an industrial environment, the site has logistics improvements over the previously leased site, including direct port access and a high-quality concrete structure requiring minimal modifications with sufficient space to expand the plant capacity in the future.

NextSource has pre-ordered process equipment with a production capacity of 3,600 tonnes per annum of spheronized and purified graphite (SPG) and coated SPG. The process equipment is currently being fabricated and assembled offshore and will be shipped to Mauritius once the EIA process is completed.

Graphite concentrate from the company’s Molo mine in Madagascar and equipment for a small-scale pilot line have already arrived at the site in order to prepare for production of samples for key OEM customers, said the company, adding that it is preparing an updated economic assessment for the site.

The quest to bring graphite projects to fruition has become more urgent since China announced in October it will require export permits for the kind of graphite used for electric vehicle batteries. Africa-mined graphite could help the car industry meet requirements under Washington’s Inflation Reduction Act, which encourages auto makers to be less reliant on Chinese components.

NextSource Materials’ stock was up over 12% in afternoon trading in Toronto. Shares were traded over 834,000 times, compared to an average daily volume of 81,198.

The Toronto-based company has a C$122 million ($89m) market capitalization.