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NextSource Materials Inc. (NSRCF), a key player in the graphite industry, has been making strategic moves to secure its position in the burgeoning electric vehicle (EV) market. The company's recent announcements highlight its commitment to expanding production capabilities and securing strategic partnerships. This article explores these developments and their potential impact on NSRCF's future prospects.

On August 5, 2025, NSRCF announced a significant multi-year offtake agreement with Mitsubishi Chemical Corporation (MCC) to supply approximately 9,000 tonnes per annum of anode active material (AAM) for North American EV markets . This partnership involves NextSource producing intermediate AAM at a planned Battery Anode Facility (BAF) in the Middle East, which MCC will process into final AAM for EV battery cell manufacturing. The agreement represents a crucial step in NextSource's vertical integration strategy, with production expected to commence in 2027.

In addition to this partnership, NSRCF has secured a US$20 million drawdown credit facility from Vision Blue Resources to support its Battery Anode Facility strategy, Molo mine ramp-up, and working capital needs . This non-dilutive facility is structured in four equal tranches of US$5 million, with the initial tranche expected by January 2025 end. The loan carries a 15% annual interest rate and is repayable on demand after June 30, 2025.

Further, NSRCF has announced positive results from a technical and economic study for its proposed 30,000 tonnes per annum (tpa) battery anode facility (BAF) in the UAE, along with securing an industrial site in Abu Dhabi Nextsource Stock Price, News & Analysis^[1]. The project demonstrates compelling economics with a total capital cost of US$291 million and a post-tax NPV8% of US$442 million with a 24% IRR. The facility will be developed in two phases, with Phase 1 requiring US$150 million to deliver 14,000 tpa of anode active material (AAM), exceeding Mitsubishi Chemical's initial requirement of 9,000 tpa. At full production, the facility is projected to generate average annual revenues of US$195 million and EBITDA of US$76 million. Initial production is planned for Q4 2026, with full production expected in early 2028.

The secured site in Abu Dhabi's Industrial City (ICAD) features an existing building requiring minimal modification and is strategically located with access to ports, logistics infrastructure, and major shipping routes. This strategic move gains additional significance following the recent 160% U.S. tariff on Chinese graphite imports.

NSRCF has also shifted its Battery Anode Facility plans from Mauritius to the Middle East, specifically in Saudi Arabia and UAE, to pursue larger opportunities . The company terminated its Mauritius lease and EIA application due to prolonged processes and potential post-approval challenges. The Middle East locations offer advantages including streamlined permitting, robust infrastructure, and strategic proximity to EV manufacturers. NextSource is currently negotiating offtake agreements with OEMs, supported by positive product qualification trials. The UAE location provides favorable tariff structures with only 10% US reciprocal tariff compared to higher tariffs on Chinese graphite anode materials.

These strategic moves underscore NSRCF's commitment to expanding its production capabilities and securing long-term offtake agreements. The company's focus on optimizing its Molo plant operations and achieving 15,000-17,000 tpa production capacity further demonstrates its dedication to driving growth in the battery materials sector.