Northern Graphite applauds U.S. procurement regulations

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Northern Graphite Corp. [NGC-TSXV; NGPHF-OTCQB] is applauding the U.S. government’s new two-year certification requirements for auto and battery makers under the final implementation rules of the Inflation Reduction (IRA) Section 30 D Clean Vehicle Tax Credit.

The Biden administration announced a decision on May 3, 2024 that deems graphite as untraceable and allows original equipment manufacturers (OEMS) at two-year transition period to source battery anode material (BAM) from China, while local North American production is established.

BAM is made from a blend of natural and synthetic graphite and has been deemed untraceable due to the difficulty in determining the source of crude oil used to manufacture synthetic graphite. The administration’s decision requires OEMs to commit to offtake agreements with North American graphite producers in the interim so that they can source from the domestic supply chain when the two-year exemption from FEOC (foreign entity of concern) requirements expires at the end of 2026.

“We look forward to continuing to work with OEMs to reach supply and price offtake agreements that will enable us to finance and our production plans and be ready to supply gigafactories with graphite anode material they need for a viable EV (electric vehicle) revolution in North America,’’ said Northern Graphite CEO Hugues Jacquemin.

Northern Graphite shares were unchanged at 12.5 cents on Monday and currently trade in a 52-week range of 48.5 cents and 11.5 cents.

Graphite is the anode material in a lithium-ion battery and is the single largest component by weight. There are no substitutes, and almost all of it comes from China So, if electric vehicle manufacturers like Tesla Motors Ltd. [TSLA-NASDAQ] and Volkswagon succeed in meeting just a fraction of their widely publicized sales targets, it goes without saying that more graphite mines will be needed to support the required lithium-ion battery production.

Northern Graphite recently said it is rebranding to reflect its unique position as North America’s only graphite producer and its strategy to evolve into a vertically integrated mine-to-market-to-battery company.

The announcement followed the recent launch of the company’s NGC Battery Materials Group to bridge the gap between graphite mining and the upstream battery market and develop the capability to produce battery anode material, with tailored graphite solutions for customers. The NGC launch is also designed to make Northern Graphite one of the sole integrated developers, producers and processors of natural graphite outside of China.

Back in April, 2022, Northern Graphite acquired the Lac des Iles (LDI) graphite mine in Quebec, an asset which has been producing graphite for over 30 years.

The company was previously focused on its shovel-ready Bissett Creek project in Ontario until its recent acquisition of a 100% interest in two graphite mines from French industrial minerals company Imerys Group for US$40 million.

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