NextSource to reach full production at Madagascar graphite mine by July

NextSource Materials (TSX: NEXT; US-OTC: NSRCF) said on Monday it plans to achieve nameplate capacity of 17,000 tonnes of concentrate per year at its Molo graphite mine in Madagascar by July.

Since announcing first graphite production in June 2023, the Canadian miner has progressed through debottlenecking and optimization activities to achieve the mine’s full capacity.

The date is a bit later than originally planned due to the identification and rectification of underperforming equipment in the screening circuit, the Toronto-based company said.

The installation of the replacement equipment is expected to be concluded in April and ramp-up will continue until June, NextSource said. 

News about the company’s production comes as graphite takes on increasing geopolitical significance, after China in November announced stricter export controls over the material. The East Asian country is the world’s top graphite producer and exporter and refines more than 90% of the material used in electric vehicle batteries and other technologies needed in the green energy transition.  

NextSource said it now expects its first commercial shipment and sale of SuperFlake graphite concentrate under offtake agreements starting in June. SuperFlake is the registered trademark for NextSource’s concentrate, which can achieve 98% carbon purity across all flake size distributions with simple flotation alone. It can also be upgraded to 99.97% battery grade purity.

The battery materials developer has achieved SuperFlake concentrate of more than 95% and it is being stockpiled at a third-party warehouse for shipment as a qualifying material to prospective customers.

NextSource said that once Molo reaches its first phase’s full capacity, it will work on a potential expansion. This second phase would boost the mine’s output to 150,000 tonnes of SuperFlake per year.

The company said its aim is to become a vertically integrated global supplier of graphite anode material with plans to construct, in stages, multiple battery anode facilities (BAFs) capable of producing CSPG at commercial scale in key jurisdictions.

NextSource shares were down 9.9% to 82¢ apiece on Monday afternoon in Toronto, near the bottom of its 52-week range of 78¢ and $3.05. It has a market capitalization of $127.7 million.