Graphite One聽(TSXV: GPH) has been earmarked for a potential $325 million financing from the Export-Import Bank of the United States (EXIM) to support its production of battery anode materials.
The funding, if approved, would be made through the EXIM鈥檚 鈥淢ake More in America鈥� and 鈥淐hina聽and Transformational Exports Program鈥� (CTEP) initiatives, which are designed to strengthen sectors that are critical to US national security and help US exporters facing competition聽from China, respectively.
Graphite represents a key battery anode material and one of only four critical minerals highlighted by the US Geological Survey as essential to all six industrial sectors. Despite its importance, the US has no domestic production of graphite and is therefore 100% dependent on imports.
that the country imports nearly half of its supply from China, its main rival and the dominant player in the global graphite supply chain, accounting for 77% of the world鈥檚 mine production.
Graphite One鈥檚 strategy
Vancouver-based Graphite One is positioned to mitigate China鈥檚 dominance by developing an advanced graphite supply chain that is vertically integrated and completely US-based. Its proposed project is anchored by what it considers to be the nation鈥檚 largest and highest-grade graphite deposit, Graphite Creek in Alaska, supplemented by an anode active materials (AAM) manufacturing plant聽located in Ohio.
A 2022 prefeasibility study projected that the entire operation would produce 75,026 tonnes of advanced graphite products per year over a 26-year life. The project has a post-tax net present value of $1.36 billion before accounting for tax credits enacted by the US Inflation Reduction Act.
The PFS assumes that the AAM manufacturing site will initially use purchased synthetic graphite, then incorporating natural graphite material once the Graphite Creek mine enters production. For the AAM plant, the company has already secured a 50-year lease agreement, including an option to purchase the property once known as Warren Depot, which was part of the National Defense Stockpile infrastructure the last time the US mined graphite.
US backings
In a letter of interest dated Oct. 18, the EXIM states that it is in support of the proposed capital funding plan by Graphite One for the AAM manufacturing facility located in Ohio鈥檚 Voltage Valley, which is expected to cost $435 million for the initial phase.
鈥淏ased on the preliminary information submitted regarding expected US exports and US jobs supported by this project, EXIM may be able to consider potential financing of up to $325 million of the project鈥檚 costs with a repayment tenor of 15 years under EXIM鈥檚 鈥楳ake More in America鈥� initiative,鈥� the EXIM stated in its letter.
Construction of the facility is expected to commence within three years. While the site鈥檚 existing power lines are sufficient for Phase 1 production target of 25,000 tonnes per year of battery-ready anode material, an expansion into the Warren Depot site could accommodate 100,000 tonnes of production annually.
鈥淓XIM鈥檚 potential financing, following on G1鈥檚 two Department of Defense grants under the Defense Production Act and from the Defense Logistics Agency, underscores the urgent need to bring US graphite supply into production, and end the nation鈥檚 100% foreign dependency,鈥� commented Anthony Huston, CEO of Graphite One.
The EXIM has also indicated that the financing may be eligible for for opportunities under the , given China鈥檚 dominance in graphite.
Upon receiving EXIM鈥檚 letter, Graphite One intends to submit a formal application in 2025, after which the EXIM will conduct all requisite due diligence before making a final financing commitment.
The company also intends to make a production decision on its graphite project upon completion of its feasibility study, which is expected in the first quarter of 2025.