NextSource Materials executes binding offtake agreement with Mitsubishi Chemical

NextSource Materials (NSRCF) and Mitsubishi Chemical (MTLHF) Corporation entered into a binding, multi-year offtake agreement. Under the terms of the Offtake Agreement, NextSource and MCC have partnered to supply AAM to a major OEM for the North American EV market. NextSource will produce and supply intermediate AAM to MCC’s Japan plant where MCC will produce final AAM for the OEM’s EV battery cell manufacturing facilities in North America. This Offtake Agreement represents a major milestone for NextSource in its strategy to become one of very few vertically integrated graphite producers outside of China. The Company is now prioritizing the development of a large-scale Battery Anode Facility in the Middle East to meet the volume capacities required for MCC and has identified several prospective sites in the United Arab Emirates. These locations offer streamlined permitting processes, robust infrastructure, and strategic proximity to other OEMs, enabling the Company to accelerate its timeline and meet growing demand for high-value graphite anode active material. Through the phased development of its BAFs, NextSource is establishing a significant downstream value-added business capable of large-scale production of coated, spheronized, and purified graphite. These facilities will serve as a secure, transparent, and fully traceable source of supply for battery and OEM customers, entirely decoupled from existing Asian supply chains, and a critical alternative for US Government-compliant supply chains.In July 2025, the U.S. imposed a substantial 160% total tariff on anode-grade graphite imports from China, combining a 93.5% anti-dumping duty with additional countervailing measures. More than 95% of the anode side of EV batteries is made from graphite, making it the most critical raw material of all battery metals. In parallel, NextSource has begun preparations to expand its Molo mine operations to ensure sufficient and secure graphite feedstock supply to support the Offtake Agreement with MCC. The Offtake Agreement designates NextSource as the sole supplier of c. 9,000 tpa of intermediate AAM to MCC for a multi-year term from the commencement of production of the Company’s BAF. This Agreement is further underpinned by a rigorous qualification process. Through close technical collaboration between NextSource and MCC to supply AAM from high-quality SuperFlake graphite concentrate, the qualification process will be finalized in 2026 through the installation of BAF processing equipment, of which approximately half has already been purchased and awaiting installation. SuperFlake anode active material will be processed by MCC in Japan and supplied to its OEM customer’s cell manufacturing facility in North America, with full-scale ramp-up from 2027. The pricing formula negotiated with MCC is based on an agreed upon price formula that comprises both a fixed and variable price component which underpins the economics of the project and secures capacity for the offtaker. The Offtake Agreement is subject to conditions precedent and contains standard termination rights, which are customary for an Offtake Agreement of this nature.