NextSource eyes Phase 2 expansion of Molo mine as graphite demand climbs
Published: 08:40 16 May 2025 EDT
NextSource Materials Inc. (TSX:NEXT, OTCQB:NSRCF) is advancing plans to scale up its graphite operations in Madagascar and exploring larger opportunities for downstream processing.
The Canadian miner, which operates the Molo graphite mine, said it is shifting its operational focus after completing a technical review of its Phase 1 operations.
Rather than investing further in optimizing its current facility, which is constrained to around 11,000 tonnes of annual capacity, the company will conserve capital and prioritize a planned large-scale Phase 2 expansion.
Phase 1 will be used for campaign production to support ongoing customer qualifications and product sales while it focuses on a broader, more cost-efficient expansion, the company said in its third-quarter operational update for the nine months ended March 31, 2025.
Production at the Molo mine began in 2023, with initial commercial shipments of SuperFlake graphite concentrate delivered to customers in Germany and the US in October 2024. Since then, NextSource has received orders for over 1,000 tonnes of product from multiple end-users for applications ranging from battery anodes to fire retardants.
The company said extreme weather, including three cyclones near the mine site in early 2025, slowed ramp-up efforts but also served as a catalyst to improve operating procedures.
A revised feasibility study incorporating learnings from Phase 1 and outlining a staged development plan for Phase 2 is expected to be completed in the third quarter of 2025.
In parallel, NextSource is moving forward with its Battery Anode Facility (BAF) strategy. The company has received approximately $12 million worth of processing equipment for a planned facility in Mauritius, which would produce 3,600 tonnes per year of graphite anode material. However, construction remains delayed pending environmental approvals.
If permits are not granted, the company said it may pivot to building a facility elsewhere, having identified alternative sites in the Middle East. Negotiations are underway with electric vehicle manufacturers to secure offtake agreements for the potential larger-scale facility, supported by successful product qualification trials.
NextSource is also in discussions with prospective strategic investors to finance the Middle East-based BAF, aiming to establish a regional supply hub to serve global customers.
The company said its strategy aligns with a shifting graphite supply landscape, as automakers seek raw materials closer to manufacturing bases and reduce dependence on Chinese suppliers. Graphite comprises over 95% of lithium-ion battery anodes by volume.
The International Energy Agency recently flagged graphite as the most vulnerable battery mineral due to its concentrated supply and geopolitical risks.
