NextSource Materials signs US$30M Abu Dhabi anode investment agreement
Hanwa and JOGMEC would take 15% at closing, while NextSource targets a second-half 2027 ramp-up for the plant's first phase.
Ines Halvorsen
A US$30 million subscription agreement signed Sept. 28 would give Japanese investors 15 per cent of an Abu Dhabi battery anode facility, NextSource Materials Inc. TSENEXT OTCMKTSNSRCF said in its release. The investment would help fund first phase capital spending, while NextSource would retain 85 per cent of the facility's project company after the subscription closes. The buyers are Hanwa Co., Ltd. TYO8078 and the Japan Organization for Metals and Energy Security, or JOGMEC, investing through a jointly owned vehicle.
The signing creates a binding commitment, but the investment has not closed. The parties still expect to sign a separate shareholders' agreement governing their rights, funding and construction. NextSource gave no date for that signature or for the subscription closing in its Sept. 28 release.
At 3:10 p.m. EDT on Sept. 25, TSENEXT was quoted at C$0.26 in Toronto, before Monday's announcement. The available quote does not measure the market's response to Monday's agreement.
The binding subscription follows NextSource's May 12 final investment decision for the facility's first phase. That decision authorized pre-construction work under staged funding conditions while external capital commitments were being finalized. It did not remove the need for project financing or the approvals required to build.
The Sept. 28 release puts initial designed output at about 14,000 tonnes of anode material a year, with ramp-up expected to begin in the second half of 2027. NextSource plans a later expansion to about 30,000 tonnes a year, but supplied no date for it. Those figures describe designed and planned output, respectively, rather than tonnes already being produced.
Construction Approvals and Funding Remain Open
NextSource says it is finalizing property agreements, advancing environmental and permitting work, awarding early works contracts and starting procurement for equipment with long delivery times. The release does not identify a permitting authority, an approval date or an equipment delivery deadline. Those open items leave the construction timetable tied to further financing and approvals.
The company says material from the facility is intended for a major manufacturer's electric vehicles through a binding, multiyear offtake agreement. Its Sept. 28 release does not name that manufacturer or give an anode material price. That distinction leaves the proposed subscription as project equity rather than sales revenue under the offtake.
"Our partnership with Hanwa and JOGMEC brings deep expertise in global battery materials, supply chains and critical mineral security, and their planned US$30 million investment provides strong validation of our strategy to establish a vertically integrated, independent supply chain of battery anode materials," NextSource chief executive Hanré Rossouw said in the Sept. 28 release.
NextSource is also seeking investors for a further 35 per cent interest in the facility's project company and discussing debt financing after receiving expressions of interest from lenders. Neither an equity subscription for that additional stake nor a loan was announced on Sept. 28. The company has not put a date on either financing decision.
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The next dated operating target is the start of first phase ramp-up in the second half of 2027. Before that, the shareholders' agreement, Japanese subscription closing and remaining funding must be settled; NextSource has not dated those steps.
