1 year ago… Oct 25, 2022 – 3.43pmNovonix is in advanced talks...

1 year ago…
Oct 25, 2022 – 3.43pmNovonix is in advanced talks with several customers about securing funding linked to offtake agreements, chief executive Chris Burns said, as the battery technology company benefits from soaring demand for its synthetic graphite anode materials.Shares in Novonix surged in recent days after it said it was in discussions about a $US150 million ($240 million) grant with the US Department of Energy to fund expanded production.Novonix said it would put the grant towards the construction of a 30,000-tonne-a-year US manufacturing facility if it was successful.The deal, which Mr Burns says is likely to be signed soon, requires Novonix to match the grant from the Department of Energy. Mr Burns said Novonix had the capital at hand to match the requirement, but it could also seek additional funding from the Department of Energy or strike a deal with parties looking to provide funding to secure much-needed offtake deals.“We are in advanced discussions with customers who are looking at financing options, prepayment or debt arrangements to support financing the plant and securing offtakes for when that plant comes online,” Mr Burns told The Australian Financial Review.“We are looking at funding arrangements that range from tens to hundreds of millions of US dollars in different forms, be it equity, prepayment or debt structures that will be coupled with long-term offtakes. If we sign an offtake over five years for these materials, we are talking about multibillion offtake contracts.”Mr Burns declined to name the companies that Novonix was talking to, but said the recently passed US Inflation Reduction Act had heightened demand from North American car manufacturers to source the materials needed to qualify for the $US7500 rebate that was expected to appeal to customers.Offtake funding agreements are increasingly popular amid soaring demand and limited supply.Mr Burns said Novonix was targeting first production from its new production facility in 2025, but was pushing to accelerate that timetable. The site of the new facility was expected to be unveiled within the next two months, Mr Burns said.Further expansion is likely amid a global push to expand electrification and global concern about China’s control of critical minerals.Mr Burns said Europe was also a logical region for expansion as it too targets rapid increases in EV usage, but Australia was still some way behind.While EV uptake is on the rise, there are fears demand could be curtailed by high prices.