Battery technology maker Novonix [ASX:NVX] was surging as high as 12% in the share market earlier on Wednesday morning, a rise which calmed by mid-morning.
The reason behind the sudden blast in share price value was most likely linked to the company’s announcement in which it said it would be entering into a joint development agreement (JDA) with LG Energy Solution (LGES).
Before lunchtime, the battery tech stock was more than 7% higher than the last closing price at the worth of $1.04 a share.
However, the NVX stock is still down by 96% in its sector over the last 12 months and 70% down compared with wider market metrics:
Source: TradingView
Novonix and LGS strike anode deal
Novonix have announced a JDA for creating artificial graphite anode material for lithium-ion batteries, and along with that, in a separate agreement Novonix plans to issue US$30 million in unsecured convertible notes to LGES.
In terms of the JDA, this will give LGES the option to purchase up to 50,000 tons of graphite anode material from Novonix’s US-based facility over a 10-year period from the start of mass production.
For the US$30 million unsecured convertible notes, these will be issued with a conversion price of $1.60 per share.
Novonix plans to use the proceeds for the continued development of anode materials, operational needs, and general corporate purposes.
LGES hopes to maximize the benefits of the Inflation Reduction Act (IRA) by expanding local battery production, as well as establishing a local supply chain for battery components, ultimately solidifying its market leadership in the US.
On this note, Novonix is looking to provide a robust, sustainable supply chain option for high-performance artificial graphite in the US — a vision which LGES supports — as it will also work to diversify its own suppliers as it expands battery cell production.
Novonix was recently selected for a US$150 million grant by the Department of Energy to support its expansion, a demonstration of commitment from the government to support the growth of supply chains.
The two companies have been in informal discussions since December 2022. They have agreed the anode material will be developed at Novonix’s current Tennessee-based facilities.
Mass production of the anode product is expected to start in 2026, with greenfield facility targets expected at an initial 30,000 tons per annum of production capacity for active anode material.
Dongsoo Kim, Senior Vice President of the Procurement Centre at LG Energy Solution, said:
‘Our partnership with NOVONIX once again demonstrates LG Energy Solution’s determination to establish a solid battery supply chain in the U.S., complementing our local manufacturing network to meet our customer’s needs for lRA-compliant batteries.
‘As we work with NOVONIX in developing a new source of artificial graphite anode material, we will stay committed to strengthening our product competitiveness and operation excellence, delivering the world-best quality products both in scale and with speed.’
Chris Burns, Novonix’s CEO, added:
‘We are excited to formalize our work with LG Energy Solution and establish the path for NOVONIX to become a supplier for LGES of artificial graphite anode material in the US. This agreement demonstrates our leading position to establish a supply chain for high-performance artificial graphite for the battery industry in the US.’
The red draught, copper in 2023
Much like graphite and lithium, copper is a hot metal slated for the EV battery boom.
But the world simply does not have enough of it to supply the rapid rate at which these batteries will need to be produced. Yet.
Our resident geologist and commodities expert, James Cooper, says there are ways to play this game, and he tells all in his most recent copper stock report.
In James’ latest report, he discusses three top copper stock picks and provides integral information that every resource investor should know and prepare for.
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Regards,
Fat Tail Commodities
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