Graphite One Inc. (TSXV: GPH) (OTCQX: GPHOF) has revealed a significant update to its Defense Production Act grant, which will now cover 75% of the expenditures for its accelerated feasibility study. This revision, effective from July 2023, increases the Department of Defense's (DoD) financial share from the previous 50% to 75%, based on a revised contract value of $49.8 million. Consequently, the DoD's maximum contribution is now set at $37.3 million.
This development is pivotal for Graphite One's ambition to establish a 100% U.S.-based graphite materials supply chain. The company has confirmed to the DoD that its Graphite Creek natural flake graphite deposit near Nome, Alaska, remains on schedule to complete the feasibility study by December 2024, pending necessary financing.
Anthony Huston, CEO and President of Graphite One, expressed that this funding boost signifies growing momentum for the company. He highlighted that this change means shareholders will see a greater return on investment, with 75% of feasibility study expenditures covered by the DoD rather than the previous 50%.
“We welcome the support of the Department of Defense as we continue our efforts to build a U.S. industrial capacity that serves the renewable energy transition, technology development, and national security,” Huston said.
The increased funding is expected to expedite Graphite One's initiative to mitigate the U.S.'s current 100% reliance on imported natural graphite, primarily sourced from China. The company's Graphite Creek deposit is the largest in the U.S. and among the largest globally, as noted by the U.S. Geological Survey. This positions Graphite One to meet the growing domestic demand for graphite, which is forecasted to rise significantly.
Graphite One's strategic plan includes three pivotal components: the extraction of graphite from its Alaskan deposit, the development of an advanced graphite material and battery anode material manufacturing plant in Ohio, and the establishment of a recycling facility to reclaim graphite and other battery materials at the same Ohio site. This integrated approach aims to create a circular economy within the U.S. graphite supply chain.
The initiative aligns with the Biden administration's objectives to reduce dependence on critical minerals from China. According to the World Bank Group, the graphite market is expected to grow by 494% by 2050, and a report from President Biden's administration projects a 2500% increase in demand for graphite by 2040.
Graphite One's project has garnered political and governmental support, indicating its potential for long-term growth. The company's management team, with expertise in mine construction, process control design, and facility management, is well-positioned to drive this ambitious project forward. The successful execution of this plan, however, remains contingent on securing the necessary financing.
As part of their broader strategy, Graphite One plans to process graphite from its Alaskan deposit into concentrate at a nearby facility, which will then be further refined into anode materials and other graphite products in Ohio. The company aims to make a production decision following the completion of the feasibility study.
CEO Anthony Huston recently participated in a White House meeting on investment and job creation, further highlighting the strategic importance of Graphite One's project in the context of U.S. national interests.
