Toronto-headquartered NextSource Materials is pivoting its battery anode facility (BAF) strategy from Mauritius to the Middle East, seeking to capitalise on faster permitting, better infrastructure, and closer proximity to electric vehicle (EV) manufacturers, the company said Monday.

The battery materials developer has terminated its lease agreement and withdrawn an environmental impact application for a proposed BAF in Mauritius, ending a multi-year effort to establish a facility there. NextSource cited delays and regulatory uncertainty for the decision, which it said would reduce financial exposure and allow for quicker deployment of its processing equipment elsewhere.

“NextSource continues to progress our commitment to a sustainable and scalable supply chain for battery anode materials,” said president and CEO Hanré Rossouw. “While the decision to terminate our lease in Mauritius has not come lightly, we are excited to pursue larger-scale opportunities in the Middle East, leveraging our expertise and assets to meet global demand more efficiently.”

The company is now prioritising potential BAF sites in Saudi Arabia and the United Arab Emirates (UAE) - regions that offer “streamlined permitting processes, robust infrastructure, and strategic proximity to global EV manufacturers”, NextSource said.

The decision comes amid ongoing negotiations with potential original equipment manufacturers to secure offtake agreements. The company said feedback from product qualification trials had been positive, and the move to larger-scale BAFs supported its aim of establishing a secure and traceable supply chain for graphite anode material.

A presence in the Middle East also positions the company to benefit from favourable trade terms. The UAE currently faces a 10% reciprocal tariff when exporting to the US, in contrast to significantly higher tariffs on graphite anode materials from China.

Battery anode facilities are designed to convert graphite concentrate into coated, spheronised, and purified graphite, which are components of lithium-ion batteries used in EVs.

NextSource’s primary asset, the Molo graphite mine in Madagascar, is one of the largest and highest-quality deposits globally and has begun production through Phase 1 operations.