NextSource Materials Inc. (TSX:NEXT, OTCQB:NSRCF) has signed a binding agreement with Syrah Resources to secure an additional source of natural graphite fines for its planned battery anode facility in Abu Dhabi, as it works to diversify feedstock ahead of ramp-up.
Under the deal, NextSource expects to source a minimum of about 34,000 tonnes and up to 68,000 tonnes in total over a seven-year period, with annual committed and optioned volumes subject to conditions precedent. These include the start of commercial production at the UAE facility and successful qualification and final approval of Syrah’s graphite by NextSource and its downstream offtake customer.
"This agreement strengthens our long‑term strategy to build a resilient and diversified supply chain for our Abu Dhabi BAF," said chief executive Hanré Rossouw.
"While Molo remains our primary and preferred feedstock, securing optionality with high‑quality third‑party material enhances our flexibility as we scale production to meet growing demand for anode active material. It is a disciplined step that supports both our near‑term ramp‑up and our broader growth ambitions."
Pricing is expected to be set quarterly by referencing an independently reported graphite fines price index, with adjustments for grade and shipping costs. If conditions aren’t satisfied or waived by 31 December 2026, Syrah may terminate without liability; if they aren’t satisfied or waived by 31 December 2027, NextSource may terminate without liability.
NextSource said the agreement supports a broader strategy to derisk its supply chain while it prioritises SuperFlake® concentrate from its Molo graphite mine in Madagascar as the primary feedstock. The company added it has ample inventory to meet its binding Mitsubishi Chemical offtake well into 2028, but wants flexibility after a 5 February 2026 letter of intent with a second major Japanese anode material producer that, if finalised, could lift expected demand and pressure planned Phase 1 capacity.
Separately, the company also announced that Jaco Crouse has resigned from his position as chief financial, having accepting a senior role with another organization, though he will remain with the Company for a transition period of up to four months, to support an orderly handover of responsibilities.