In a significant development for the U.S. electric vehicle (EV) industry, Graphite One Inc. (TSX-V: GPH) (OTCQX: GPHOF) has announced a non-binding supply agreement with Lucid Group Inc. (NASDAQ: LCID) for anode active materials (AAM). This landmark collaboration represents the first synthetic graphite supply agreement between a U.S. graphite developer and a U.S. EV company, highlighting a crucial step towards establishing a domestic supply chain for advanced graphite materials.
The agreement comes at a critical time as the United States seeks to reduce its dependence on foreign sources for essential battery materials. Currently, the U.S. is 100% import-dependent for both synthetic and natural graphite, a situation that Graphite One aims to change with its comprehensive plan to create a fully domestic graphite supply chain.
Under the terms of the non-binding agreement, Graphite One will supply 5,000 tonnes per annum of anode material to Lucid once production commences. The initial term is set for five years, with pricing based on an agreed formula linked to future market pricing and subject to base case pricing agreeable to both parties.
Peter Rawlinson, CEO and CTO at Lucid, emphasized the importance of this agreement in accelerating the transition to sustainable vehicles and developing a robust domestic supply chain. He stated, ‘Through work with partners like Graphite One, we will have access to American-sourced critical raw materials, helping power our award-winning vehicles made with pride in Arizona.’
Graphite One’s President and CEO, Anthony Huston, called this a ‘historic moment’ for both companies and North America. He highlighted the company’s progress in developing a 100% U.S. domestic supply chain and expressed gratitude for investor support and a grant from the Department of Defense. Huston also noted that, subject to project financing, the supply agreement with Lucid puts Graphite One on track to produce revenue in 2027.
The agreement follows Graphite One’s recent selection of a brownfield site in Warren, Ohio, for its proposed AAM facility. This strategic location, previously used by the U.S. Government to stockpile National Defense critical minerals, is situated in the heart of the automobile industry and offers ample low-cost electricity from renewable energy sources. The site’s existing infrastructure can support Graphite One’s initial production target of 25,000 tonnes per year of battery-ready anode material, with potential for expansion to 100,000 tonnes per year.
Graphite One’s ambitious plans extend beyond just mining and processing. The company aims to create three integrated operational pillars: mining graphite from its Graphite Creek property in Alaska, processing it into concentrate, and manufacturing natural and artificial graphite anode active materials at its Ohio facility. Additionally, Graphite One plans to establish a recycling facility to reclaim graphite and other battery materials, completing its circular economy strategy.
The company’s efforts have garnered significant government support, including a $37.5 million grant from the Department of Defense for its feasibility study and a $4.7 million contract to develop a graphite-based foam fire suppressant. These grants underscore the strategic importance of Graphite One’s project in enhancing U.S. critical mineral capabilities.
As the global demand for electric vehicles continues to rise, the establishment of a domestic graphite supply chain becomes increasingly crucial. This agreement between Graphite One and Lucid Motors represents a significant step towards reducing U.S. reliance on foreign sources for critical battery materials and strengthening the country’s position in the rapidly evolving EV market.
The collaboration between Graphite One and Lucid Motors not only addresses immediate supply chain concerns but also sets the stage for long-term growth and innovation in the U.S. EV industry. As these companies work together to create a more sustainable and secure future for electric transportation, their partnership may serve as a model for other domestic collaborations in the critical minerals sector.
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