NextSource Materials Inc. (TSX:NEXT)(OTCQB:NSRCF) (NextSource or the Company) and Mitsubishi Chemical Corporation (MCC), Japan’s largest chemical company and a leading supplier of anode active material (AAM) to original automotive equipment manufacturers (OEMs), have entered into a binding, multi-year offtake agreement (the Offtake Agreement). Under the terms of the Offtake Agreement, NextSource and MCC have partnered to supply AAM to a major OEM for the North American EV market. NextSource will produce and supply intermediate AAM to MCC’s Japan plant where MCC will produce final AAM for the OEM’s EV battery cell manufacturing facilities in North America.
Highlights
Multi-year offtake agreement signed with Mitsubishi Chemical Corporation for supply of c. 9,000 tonnes per annum (tpa) of anode active material
Partnering with Mitsubishi Chemical Corporation to supply major OEM manufacturer anode active material for its North American electric vehicle (EV) market
Accelerates development of NextSource’s Battery Anode Facility in the Middle East
Significant milestone towards achieving vertical integration by 2027
This Offtake Agreement represents a major milestone for NextSource in its strategy to become one of very few vertically integrated graphite producers outside of China. The Company is now prioritizing the development of a large-scale Battery Anode Facility (BAF) in the Middle East to meet the volume capacities required for MCC and has identified several prospective sites in the United Arab Emirates (UAE). These locations offer streamlined permitting processes, robust infrastructure, and strategic proximity to other OEMs, enabling the Company to accelerate its timeline and meet growing demand for high-value graphite anode active material.
Hanré Rossouw, President and CEO of NextSource, stated,
‘We are excited to have entered into a partnership with Mitsubishi Chemical Corporation through a binding offtake agreement for the production of active anode material in the Middle East, leveraging high-quality graphite feedstock from our Molo mine in Madagascar. This partnership underscores our commitment to delivering sustainable, high-performance anode materials to meet the growing demand from OEM and battery manufacturers. By integrating world-class resource supply with advanced processing capabilities, we are building a resilient and scalable solution that supports global electrification efforts.’
Through the phased development of its BAFs, NextSource is establishing a significant downstream value-added business capable of large-scale production of coated, spheronized, and purified graphite (CSPG). These facilities will serve as a secure, transparent, and fully traceable source of supply for battery and OEM customers, entirely decoupled from existing Asian supply chains, and a critical alternative for US Government-compliant supply chains.In July 2025, the U.S. imposed a substantial 160% total tariff on anode-grade graphite imports from China, combining a 93.5% anti-dumping duty with additional countervailing measures.
More than 95% of the anode (negative) side of EV batteries is made from graphite, making it the most critical raw material of all battery metals (Benchmark Mineral Intelligence, July 2025). In parallel, NextSource has begun preparations to expand its Molo mine operations to ensure sufficient and secure graphite feedstock supply to support the Offtake Agreement with MCC.
Today’s announcement also underpins NextSource’s engagement with strategic financing partners where it is in advanced discussions regarding assistance in funding construction of both the large-scale BAF and Molo mine expansion.
Offtake Agreement Terms
The Offtake Agreement designates NextSource as the sole supplier of c. 9,000 tpa of intermediate AAM to MCC for a multi-year term from the commencement of production of the Company’s BAF.
This Agreement is further underpinned by a rigorous qualification process. Through close technical collaboration between NextSource and MCC to supply AAM from high-quality SuperFlake® graphite concentrate, the qualification process will be finalized in 2026 through the installation of BAF processing equipment, of which approximately half has already been purchased and awaiting installation. SuperFlake® anode active material will be processed by MCC in Japan and supplied to its OEM customer’s cell manufacturing facility in North America, with full-scale ramp-up from 2027.
The pricing formula negotiated with MCC is based on an agreed upon price formula that comprises both a fixed and variable price component which underpins the economics of the project and secures capacity for the offtaker.
The Offtake Agreement is subject to conditions precedent and contains standard termination rights, which are customary for an Offtake Agreement of this nature.
Offtake Capacity Requirements Underpin NextSource’s Growth Strategy
Through close technical collaboration, qualification AAM from NextSource, using SuperFlake® graphite from Molo Phase 1 as feedstock, has been provided to and evaluated by MCC for the OEM’s battery manufacturer, confirming compliance with its specific anode quality and performance requirements.
The Company has begun preparations for an industry-scale Molo Phase 2 expansion, which is expected to benefit from larger economies of scale, while continuing to qualifying its graphite products and servicing existing key customers through Phase 1 campaign production.
The completion of the technical and economic studies for both the mine and a UAE-based BAF will inform the final investment decisions, including capital requirements and detailed financing plans. The significant potential of an expanded Molo Phase 2 and large-scale BAF in the Middle East offer a strong foundation for growth by securing further offtake agreements for SuperFlake® AAM.
About Mitsubishi Chemical Corporation
Mitsubishi Chemical Corporation is a 100%-owned subsidiary of Mitsubishi Chemical Group Corporation. Mitsubishi Chemical Group aims to be a ‘Green Specialty Company’ committed to solving social problems and to delivering impressive results to customers with the power of materials, under its Purpose that ‘We lead with innovative solutions to achieve KAITEKI, the well-being of people and the planet.’ Mitsubishi Chemical Group Corporation is listed on the Tokyo Stock Exchange Prime Market (Code: 4188).
For further information, please visit the company website: https://www.mcgc.com/english/
About NextSource Materials Inc.
NextSource Materials Inc. is a battery materials development company based in Toronto, Canada that is intent on becoming a vertically integrated global supplier of battery materials through the mining and value-added processing of graphite and other minerals.
The Company’s Molo graphite project in Madagascar is one of the largest known and highest-quality graphite resources globally, and the only one with SuperFlake® graphite. The Molo mine has begun production, with Phase 1 mine operations currently being optimized.
The Company is also developing a significant downstream graphite value-add business through the staged rollout of Battery Anode Facilities capable of large-scale production of coated, spheronized and purified graphite for direct delivery to battery and automotive customers, outside of existing Asian supply chains, in a fully transparent and traceable manner.
NextSource Materials is listed on the Toronto Stock Exchange (TSX) under the symbol ‘NEXT’ and on the OTCQB under the symbol ‘NSRCF’.
For further information about NextSource, please visit our website at nextsourcematerials.com
Investors may contact: Brent Nykoliation, Executive Vice President +1.416.364.4911 brent@nextsourcematerials.com
Cautionary Note
This press release contains statements that may constitute ‘forward-looking information’ or ‘forward-looking statements’ within the meaning of applicable Canadian and United States securities legislation. Readers are cautioned not to place undue reliance on forward-looking information or statements. Forward looking statements and information are frequently characterized by words such as ‘plan’, ‘expect’, ‘project’, ‘intend’, ‘believe’, ‘anticipate’, ‘estimate’, ‘potential’, ‘possible’ and other similar words, or statements that certain events or conditions ‘may’, ‘will’, ‘could’, or ‘should’ occur. Forward-looking statements include any statements regarding, among others, timing of commissioning and achievement of nameplate capacity, including the processing plant, process improvements and mine plant adjustments as well as production estimates, and financing and timing thereof, the rollout of Battery Anode Facilities including the capabilities and the timing thereof, and achievement of offtake agreements and required financing, and any conditions precedent as part of an offtake agreement. These statements are based on current expectations, estimates and assumptions that involve a number of risks, which could cause actual results to vary and, in some instances, to differ materially from those anticipated by the Company and described in the forward-looking statements contained in this press release. No assurance can be given that any of the events anticipated by the forward-looking statements will transpire or occur or, if any of them do so, what benefits the Company will derive there from. The forward-looking statements contained in this news release are made as at the date of this news release and the Company does not undertake any obligation to update publicly or to revise any of the forward-looking statements, whether because of new information, future events or otherwise, except as may be required by applicable securities laws. Although the forward-looking statements contained in this news release are based on what management believes are reasonable assumptions, the Company cannot assure investors that actual results will be consistent with them. These forward-looking statements are made as of the date of this news release and are expressly qualified in their entirety by this cautionary statement. Subject to applicable securities laws, the Company does not assume any obligation to update or revise the forward-looking statements contained herein to reflect events or circumstances occurring after the date of this news release.
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