Canada-listed NextSource Materials remains committed to ramping up and expanding operations at its Molo graphite mine in Madagascar, despite ongoing market challenges.

The company, headed by Hanré Rossouw, says it is balancing production with demand to ensure economic viability.

Construction of the mine was completed in early 2023, with commissioning starting in March. However, NextSource has yet to declare commercial production.

Since first producing graphite concentrate in June 2023, the company has implemented several process enhancements, including replacing final product dryer equipment and finished-product screens following a third-party assessment.

In October 2024, NextSource successfully exported its first full container loads of high-quality, on-specification coarse flake graphite concentrate from Madagascar’s Port of Tulear to Germany and the US. These shipments, delivered under existing sales agreements, cater to demand from sectors including refractory materials, graphite foils for consumer electronics, and fire-retardant applications. Verification is under way to ensure compliance with commercial sales specifications.

Despite delays in reaching commercial production, plant optimisation remains a key priority to sustain output while controlling costs.

"We will persist in balancing the ramp-up of our Molo mine with the development of our market and key sales channels, despite facing challenging market conditions. This ramp-up will prioritise quality and volumes, while also documenting valuable insights to inform and apply to our further expansion plans for Molo," states NextSource.

The company acknowledges that natural graphite prices have declined in 2024, citing weaker-than-expected electric vehicle (EV) demand and increased supply from China. However, the company remains bullish on long-term fundamentals.

Industry forecasts project significant demand growth between 2025 and 2030, driven by the accelerating adoption of lithium-ion batteries. Citing Benchmark Minerals Intelligence, NextSource warns that 97 new graphite mines will be required by 2035, with potential supply shortages lasting up to 20 years unless supply sources diversify beyond China.

The company notes that graphite accounts for more than 95% of lithium-ion battery anodes.

NextSource has set key milestones for the 2025/26 financial year, including ramping up Molo to its targeted production capacity of 15 000 t/y to 17 000 t/y of SuperFlake graphite concentrate.

The company also aims to formally declare commercial production while continuing to build its customer base and sales channels. Once Molo reaches commercial production, NextSource will provide formal guidance on output, revenue, and operating costs.

Meanwhile, the company is advancing plans for a battery anode facility (BAF) in Mauritius, with an environmental impact assessment under way. The facility is designed for an initial output of 3 600 t/y of spherical, purified graphite (SPG) and/or coated SPG, with key equipment already received.

In parallel, work is progressing on additional BAFs in the Middle East, including a proposed facility in Saudi Arabia. A technical study has confirmed the feasibility of an initial 20 000 t/y production capacity, with expansion to 100 000 t/y through staged growth.