KEY POINTS
- Graphite One plans US-based anode production.
- EXIM may provide $325 million loan for facility.
- Project aims to reduce dependence on China.
The Export-Import Bank of the United States (EXIM) is considering lending Graphite One (TSXV: GPH) up to $325 million to support the company’s domestic battery anode material production.
The loan, which is currently being reviewed, is a component of EXIM’s “Make More in America” and “China and Transformational Exports Program” (CTEP) programs, which aim to lessen dependency on China and boost sectors vital to US security.
Addressing US graphite dependency
Despite being a vital component of batteries, graphite is not mined domestically in the United States. China currently supplies about half of the graphite used in the United States, which currently imports all of its graphite.
Moreover, EXIM intends to lessen this dependency and boost US competitiveness in the battery metals industry by funding Graphite One’s anode materials manufacturing facility.
The core of Graphite One’s strategy is its Graphite Creek project in Alaska, which has one of the biggest graphite resources in the world.
In addition, with its proposed anode active materials (AAM) plant in Ohio as its anchor, the project seeks to establish a vertically integrated graphite supply chain centered in the United States.
A prefeasibility study from 2022 projected that the entire operation could produce 75,026 tonnes of advanced graphite products annually over 26 years, with a net present value of $1.36 billion post-tax credits.
Supporting US competitiveness
As the US government continues to prioritize lowering foreign reliance on vital minerals, the EXIM has endorsed Graphite One.
“The loan and two Department of Defense grants demonstrate the urgency of increasing domestic graphite production,” said Anthony Huston, CEO of Graphite One.
However, with EXIM financing up to $325 million over 15 years, the Ohio plant’s initial phase is anticipated to cost $435 million. Construction on the facility is expected to start in three years.
After the Graphite Creek mine is put into production, the AAM manufacturing facility will switch from using synthetic graphite to natural graphite.
According to Mining.com, production might reach 100,000 tons per year once the mine is operational, and the company has a 50-year lease for its Ohio location. Moreover, this investment aims to break China’s grip on the global graphite market and strengthen the US supply chain.
Future prospects and next steps
After a feasibility study is finished early in 2025, Graphite One intends to formally seek for EXIM financing.
The loan, if granted, would be a significant step in the United States’ efforts to increase battery manufacturing capacity and revive domestic graphite production.
By weakening China’s control over the graphite supply chain, the project may significantly lower the risks connected with reliance on imports.
Also, as it is ready to increase production, Graphite One keeps working to build more alliances and streamline its business practices.
However, the company’s emphasis on producing graphite in the US is in line with larger initiatives to create a more robust supply chain for battery metals.
