EV1 to build its downstream plant in the USA

Published 16-MAY-2023 10:18 A.M.

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Our 2021 Wise-Owl Pick of the Year Evolution Energy Minerals (ASX: EV1) is looking to build its downstream processing strategy in the USA.

It was always out of either the EU or USA for the plants location and today EV1 confirmed it would commit to developing its downstream plant in the USA.

Testwork with the company’s US tech partner has already confirmed that EV1’s fine flake graphite can be used to produce Coated Spherical Graphite - the type of graphite needed to produce lithium-ion batteries.

Why the USA?

1. Graphite is on the US critical minerals list:

The US government has graphite listed on its critical minerals list.

Forecasts by the US Department of Energy (“DOE”) have demand for active anode materials (graphite battery anodes) to ~700,000 tonnes per year.

The US has also recently introduced the Inflation Reduction Act (IRA) in which tax credits for EVs were excluded for companies that don’t use raw materials from “friendly sources”.

The new IRA rules dictate that electric vehicles can only qualify for subsidies if more than 40% of the critical raw materials in the battery come from the US or a country it has a free trade agreement with the US.

Cars with batteries that are built with raw materials sourced from “unfriendly” countries would not be eligible for subsidies which would make them less competitive in the marketplace.

At the moment ~85% of the worlds battery anodes are produced in China and so we think the US location is strategically a strong location for EV1 to build out its downstream strategy.

2. The US is pouring capital into battery materials:

Inflation Reduction Act (IRA) - The US Government has mandated that by 2027, 80% of critical minerals in US-made EV batteries must come from US miners or recycling plants, or mines in countries with free trade arrangements with the US.

Bipartisan Infrastructure Law (BIL) - Access to ~US$7 billion of funding opportunities in the form of grants for the battery materials and processing industry.

EU Critical Raw Materials Act - Focused on onshoring critical minerals supply and processing capacity. The act has an objective of ~40% of supply by 2030.

Mineral Security Partnership (MSP) – Collaboration commitment to invest in critical minerals supply chains between Australia, Canada, Finland, France, Germany, Japan, the Republic of Korea, Sweden, the United Kingdom, the United States and the European Commission.

3. EV1’s product can produce battery spec material -

EV1’s fine flake graphite can produce on spec material, testwork found:

Purity levels of 99.9995% via thermal purification - higher than what is required for batteries.
Yield ~64% of spherical graphite after milling - industry average is ~40%.
Outperforms synthetic graphite in electrical conductivity applications.

Most importantly, EV1 has uncontracted fine flakes that it hasnt signed offtake agreements on, this means the company can supply its own downstream processing plant with fine flake feedstock.