NextSource Materials Inc. (TSX:NEXT, OTCQB:NSRCF) has signed a binding multi-year offtake agreement with Japan’s Mitsubishi Chemical Corporation (MCC) to supply graphite-based anode material for electric vehicle (EV) batteries destined for the North American market.
Under the deal, NextSource will produce intermediate anode active material (AAM) using graphite from its Molo mine in Madagascar and ship it to MCC’s plant in Japan. MCC will then process the material into finished AAM for use by a major automotive original equipment manufacturer (OEM) in North America.
The agreement positions NextSource to become one of the few vertically integrated graphite suppliers outside of China, the dominant player in global battery materials supply.
“This partnership underscores our commitment to delivering sustainable, high-performance anode materials to meet the growing demand from OEM and battery manufacturers,” said NextSource CEO Hanré Rossouw.
“By integrating world-class resource supply with advanced processing capabilities, we are building a resilient and scalable solution that supports global electrification efforts.”
In response to the deal, NextSource said it is prioritizing the development of a large-scale Battery Anode Facility (BAF) in the United Arab Emirates to meet MCC’s volume needs. The company has identified several potential sites in the UAE.
The offtake agreement covers approximately 9,000 tonnes per annum of intermediate AAM over a multi-year term, beginning with the start of production at the new BAF. The final product will be used by MCC’s OEM client in North America, with full-scale ramp-up expected in 2027.
The deal follows the US government’s decision in July to impose a combined 160% tariff on Chinese imports of anode-grade graphite, intensifying the push for alternative supply chains. More than 95% of EV battery anodes are made from graphite, making it the most critical raw material among battery metals, according to Benchmark Mineral Intelligence.
NextSource said about half of the required processing equipment for its BAF has already been purchased, and that a rigorous qualification process for the SuperFlake graphite-based material is expected to be completed in 2026.
The company has also begun preparations to expand its Molo mine under a proposed Phase 2 development to ensure sufficient feedstock supply, while continuing to serve existing customers through current production.
Advanced discussions are underway to support both the BAF buildout and Molo expansion, NextSource said. Final investment decisions will follow the completion of technical and economic studies.
The update was welcomed by investors, who sent shares of NextSource almost 17% higher at C$0.49.