CENTENNIAL, Colo. - Westwater Resources, Inc. (NYSE American: WWR), a company specializing in energy technology and the development of battery-grade natural graphite, has announced a significant production increase at its Kellyton Graphite Processing Plant. The company now plans to produce 12,500 metric tons (MT) of battery-grade natural graphite anode material annually, a 25% increase from the previously projected 10,000 MT.
This production boost is in response to growing market demand for domestically produced battery anode materials, which has been strengthened by recent U.S. government regulations and Chinese export restrictions on graphite. The U.S. Department of the Treasury has issued guidance that requires electric vehicle (EV) batteries to use graphite compliant with the Inflation Reduction Act (IRA) to be eligible for federal tax credits. Additionally, China now mandates exporters to apply for permits to ship various types of graphite, including battery-grade natural graphite, which has raised supply-chain concerns.
Westwater's Kellyton Plant, currently under construction in east-central Alabama, is expected to meet these new regulatory requirements and provide an IRA-compliant product. Despite the increase in production capacity, the company states that the cost estimate for Phase I of the plant remains at $271 million.
The announcement follows Westwater's recent signing of its first multi-year offtake agreement, with volumes expected to ramp up to 10,000 MT per year. According to Terence J. Cryan, Westwater's Executive Chairman, the increased production capacity not only meets customer demand but also improves the projected economics and profitability of the plant, aiding in securing debt financing for its completion.
Westwater Resources, which also owns the Coosa Graphite Deposit in Coosa County, Alabama, believes that these export restrictions continue to highlight the supply-chain risk for the U.S. and other countries related to natural graphite products. The company's efforts to increase production capacity are seen as a strategic move to ensure a more secure supply of critical materials for the battery industry.
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