NextSource Materials Inc. (TSX:NEXT, OTCQB:NSRCF), the Toronto-listed graphite miner, has signed a binding supply agreement with Syrah Resources, the Australian graphite producer, to provide feedstock for its planned battery anode facility in Abu Dhabi.
Under the deal, NextSource will source between 34,000 and 68,000 tonnes of natural graphite fines from Syrah over seven years, with annual volumes subject to conditions including the commencement of commercial production at the Abu Dhabi plant and approval of Syrah's material by NextSource's downstream customers.
Pricing will be set quarterly by reference to an independently published natural graphite fines index, adjusted for product grade and shipping costs.
The agreement includes two termination clauses: Syrah may walk away without liability if conditions are not met by the end of 2026, while NextSource has a corresponding right to exit if conditions remain unsatisfied by the end of 2027.
The deal is designed to complement supplies from NextSource's Molo Graphite Mine in Madagascar, which the company describes as its primary and preferred feedstock source.
NextSource said it has sufficient stockpiled concentrate from Molo to meet volumes required under its existing supply agreement with Mitsubishi Chemical, the Japanese industrial group, well into 2028, with that contract covering approximately 9,000 tonnes per annum of anode active material over a multi-year period.
The additional supply flexibility takes on greater significance following NextSource's announcement last month of a letter of intent with a second unnamed Japanese anode material producer.
If that agreement is finalised, NextSource said the combined customer commitments would fully utilise and potentially exceed the planned first-phase production capacity of the Abu Dhabi facility, making diversified feedstock supply a practical necessity rather than a precaution.