Evolution Energy Minerals (ASX: EV1) has committed to the US as the jurisdiction for its downstream battery anode strategy to produce coated spherical purified graphite (CSPG).
The company said the US Department of Energy’s (DOE) forecasts the US will reach 796GWh of battery capacity by 2026, which will require 700,000 tonnes per year of active anode materials, was an important consideration.
This demand requirement, together with the various policy initiatives to incentivise the supply of critical minerals into the US market and the manufacture of battery anode materials, makes the US an ideal location to establish Evolution’s downstream facility for processing Chilalo fine flake graphite,” Managing Director, Phil Hoskins, said.
He added that the US has designated graphite as a strategic critical mineral and the combination of strategic importance of graphite and the US Government’s commitment to both securing the supply of strategic critical minerals and developing domestic anode manufacturing capacity, presents Evolution with an exceptional opportunity for vertical integration.
Evolution’s Chilalo Graphite Project in Tanzania will provide the feedstock for the downstream operations, and the US facility will use environmentally sustainable processes to produce graphite for US markets.
“We have already confirmed the superior performance of Chilalo fine flake graphite for the production of CSPG and committing to a downstream processing strategy is the obvious next step. The US has numerous states with low cost renewable power grids ideally suited to environmentally friendly thermal purification of graphite as well as a favourable political environment for new critical mineral processing,” Mr Hoskins said,
“Establishing ex-China mine-to-anode supply, as with other critical minerals, is one of the most compelling market opportunities in the critical minerals space right now, evidenced by the extensive range of Government range of policy initiatives.
“Whilst Chilalo’s fine flake graphite is keenly sought after by offtakers, we are firmly focused on establishing a vertically integrated business in which our Chilalo Project supplies fine flake graphite to an Evolution processing facility in the US. Not only does this provide a compelling opportunity for value addition, but it provides other potential sources of funding for Chilalo itself.”
Evolution has incorporated a wholly owned US subsidiary, Evolution Energy Solutions LLC (EES), the entity that will carry out all work on the company’s downstream related activities in the US, including feasibility studies, site selection, obtaining government funding support and developing relationships with end users.
In March 2023, US Vice President Kamala Harris visited Tanzania as part of a strengthening of economic ties between the US and Tanzania, and with Africa more broadly. With US backing, Tanzania is building a processing facility at the Kabanga nickel project in north-western Tanzania, that is targeted to deliver battery-grade nickel to the United States and global markets by 2026.
With the US Government prioritising security of ex-China critical minerals supply, this strengthening of economic ties between the US and Tanzania further validates Evolution’s commitment to a vertically integrated business with its Chilalo graphite providing feed for a US based downstream processing facility.
Next steps
Substantial testwork has already taken place and site selection within the US is advancing. Evolution is in the process of building the team to deliver the US strategy.