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Northern Graphite Announces First Quarter 2025 Results
Record-High Average Sales Prices, Volumes Impacted by Maintenance Shutdown France/Namibia BAM Project Wins "Strategic" Status Under EU Critical Raw Material Act Mill Maintenance Completed at Lac des Iles Mine Ottawa, Ontario--(Newsfile Corp. - May 30, 2025) - Northern Graphite Corporation (TSXV: NGC) (OTCQB: NGPHF) (FSE: 0NG) (XSTU:0NG) (the "Company" or "Northern") is pleased to provide an operating summary and financial highlights for the three month period ending March 31, 2025. The Company's Financial Statements and Management's Discussion and Analysis for the period have been filed on SEDAR+ and posted to the Company website. "In a challenging market environment, Northern Graphite is pushing forward on its growth catalysts. Our Battery Materials Division marked its one-year anniversary by winning 'Strategic Project' status under the EU's Critical Raw Materials Act for a proposal to build a BAM facility in France. This recognition reinforces our broader strategy to build a fully integrated, mine-to-market company supplying processed natural graphite to the lithium-ion battery sector," said Chief Executive Officer Hugues Jacquemin. "At our Lac des Iles ("LDI") mine, we are continuing strict cost controls to preserve cash and working to boost output and satisfy more customer demand than we can currently supply. While commanding record average sales prices for our graphite, cutting costs and increasing income from operations, we completed a major maintenance shutdown in Q1. At the same time, we have yet to secure financing to extend the LDI pit and add about eight years of life to the mine before it runs out of ore by the end of this year. As global markets continue to evolve, we remain flexible, focused, and ready to pivot where necessary to drive our vision forward." To view an enhanced version of this graphic, please visit: Operational Highlights: Driving Battery Strategy The Company experienced strong demand through the first quarter of the year, even amid geopolitical uncertainty and after negotiating higher pricing with customers for 2025; Production for the quarter was hampered by a mill maintenance shutdown completed in mid-January and by a lack of ore availability, however it began to improve in the second quarter; A year after its launch, the NGC Battery Materials division ("NGCBM") achieved some important milestones: On March 31, 2025, the Company announced that its proposal to upgrade graphite from the Okanjande project in Namibia into Battery Anode Material ("BAM") in France was selected as one of 47 Strategic Projects under the European Union's Critical Raw Materials Act ("CRMA"); The Company advanced plans to build a BAM plant in Baie-Comeau with an agreement with The BMI Group to evaluate the feasibility of a brownfield facility at a former paper mill which could reduce overall capex and time to market; In January, the Company began providing samples of three standard BAM products made from LDI graphite and according to the requirements of leading battery makers; The Company announced key management changes in the quarter, appointing Maximillian Meier as Chief Operating Officer and Michael Grimm, the President of Northern's Battery Materials Division, as Chief Commercial Officer; and The Company is in ongoing, active discussions with various government organizations at the federal and provincial level, and internationally, to gain support for its projects and to speed up development of the battery anode supply chain. Financial Highlights: The Company realized record-high average sales prices in the first quarter of $2,550 per tonne (US$1,776 per tonne), 37% above the first quarter of 2024, mainly due to price increases implemented in 2025 and a product mix that included a higher percentage of higher priced flake sizes. This favorable trend is continuing into the second quarter; Revenue fell 27% in the quarter to $4.0 million, based on 1,585 tonnes of graphite concentrate sold. This represents a 47% decrease in volume compared to the first quarter of 2024 as sales were negatively impacted by a maintenance shutdown and production issues after the restart in mid-January; Cash costs of $1,797 (US$1,252) per tonne of graphite concentrate sold increased by 10% compared to costs of $1,628 per tonne (US$1,207) in the first quarter of 2024, primarily due to changes in the sales mix that resulted in more, higher-cost inventory being sold in the 2025 quarter and higher mine and plant costs per tonne produced; Income from mine operations of $0.3 million, compared to a loss from mine operations of $0.5 million during the prior year's first quarter; General and administrative expenses during the first quarter of 2025 increased to $2.5 million versus $2.3 million in the first quarter of 2024, primarily due to legal expenditures and costs related to NGCBM which was just starting up in the prior year period, but were partially offset by the impact of strict overhead cost control measures and lower Namibian costs; During the fourth quarter of 2024 the Company placed the LDI plant and mine under a temporary shutdown for maintenance and repairs and resumed mining and milling operations in mid-January 2025. Costs incurred during the first quarter of 2025 during the shutdown were $0.4 million. During the first quarter of 2024, the LDI mine was on shutdown with costs of $0.6 million. These amounts were recorded in the condensed interim consolidated statements of loss and other comprehensive loss as care and maintenance expenses; The Okanjande plant was temporarily placed in care and maintenance in the third quarter of 2023. Holding costs of $0.3 million incurred during the first quarter of 2025 (2024 - $0.5 million) were recorded in the condensed interim consolidated statements of loss and other comprehensive loss as care and maintenance expenses; Finance costs were $3.2 million in the quarter (2024 - $3.1million). They increased as the impact of higher accretion rates were only partially offset by gains on a revaluation of the Company's royalty liability and senior debt of $0.2 million and $0.2 million, respectively, due to modifications to the anticipated timing of royalty and interest payments. Almost all of the finance costs were non-cash items; A net loss of $5.3 million ($0.04 per share) which included significant non-cash charges relating to depletion and depreciation, finance costs, impairment expenses and drawdown of inventories. Cash used in operating activities was $0.3 million, compared to 0.4 million used in the fourth quarter of 2024; As of March 31, 2025, in line with previous quarters, the Company continued to report its senior secured loan ($26.1 million) and its royalty financing ($15.8 million) as current liabilities as the Company has not met the following covenants related to these instruments: Senior secured loan - As at March 31, 2025, the Company had not paid accrued interest of $3.5 million (US$2.5 million), maintained, at all times, on a consolidated basis, positive working capital, and maintained, at all times, on a consolidated basis, a minimum cash balance of US$750,000; Royalty Financing - As at March, 2025, the Company had not paid royalty amounts with respect to 2024 totaling $2.9 million (US$2.0 million), and has not paid royalty amounts with respect to the first quarter of 2025 of $0.5 million (US$0.4 million) which were due on April 30, 2025; The Company's lender and royalty holder have waived all defaults as of May 29, 2025 effective March 31, 2025. Discussions continue with respect to amending the terms of the senior secured loan and royalty financing to better align them with project timelines that have shifted with markets that are evolving at a slower pace than forecast; The Company's working capital optimization efforts on inventories and receivables offset by the above noted senior debt and royalty classification to current liabilities ($41.8 million in total), resulted in a negative working capital balance of $41.2 million as at March 31, 2025. To view an enhanced version of this graphic, please visit: Northern is advancing toward its goal of becoming a vertically integrated, mine-to-market supplier to traditional downstream customers and to the emerging market for battery anode material. The Company's strategy is to expand production at its Lac des Iles ("LDI") mine, resume and expand production at the Okanjande project in Namibia, advance the Bissett Creek and the Mousseau projects towards development, develop downstream capacity to produce anode material for use in LiBs and EVs in North America and Europe and upgrade graphite mine concentrate into value added industrial products. Market Commentary Amid ongoing geopolitical uncertainty, trade turbulence, and supply chain pressures that continue to underscore the need for secure and diversified sources of graphite, industrial demand for the Company's graphite products remained strong through the first quarter as Northern sold LDI graphite at record-high average prices. This demand trend is expected to continue through 2025, even amid trade tariffs introduced by the administration of US President Donald Trump and with price increases implemented in January of this year. Under the terms of the United States-Mexico-Canada Agreement (USMCA), graphite from Canada remains exempt from new tariffs and Northern's customers have not experienced any negative tariff-related impacts to date. Northern is a key supplier of graphite to U.S. industrial markets, which account for approximately 85 percent of sales. With an estimated 20 percent share of U.S. industrial markets, Northern continues to benefit from strong demand in the refractory industry, where graphite is essential in the production of crucibles, casting molds, and blast furnace linings. Large and jumbo flake graphite — critical to these applications — has become increasingly scarce after China, the dominant producer of graphite, reduced mining activity due to elevated inventories of anode material, effectively removing much of its large-flake supply from the market. At the same time, supply from Western producers was constrained in the quarter by operational challenges, compounding tight global markets. Longer-term, the momentum behind graphite and critical minerals is building, and the Company is actively engaging with governments from the United States and Canada to the European Union as they map out strategies to ensure stable and sustainable supply chains. In early May, Northern participated in high-level discussions with industry and government policymakers in Washington and in Paris where discussions were led by French President Emmanuel Macron. The global industry is especially attuned to developments in U.S. trade policy as the administration of President Trump continues to shape the critical minerals landscape with its evolving tariff regime. In a move that could eventually boost demand for North America-sourced natural and synthetic graphite, on May 20 the U.S. Department of Commerce announced a preliminary decision to impose tariffs of up to 721% on imports of natural and artificial graphite active anode material ("AAM") — used to produce lithium-ion battery anode material — from China after investigating allegations that China is subsidizing production and supply of AAM to the United States. While preliminary, the decision sets the stage for meaningful anti-subsidy duties on Chinese graphite active anode material and marks a major step toward leveling the playing field and creating local demand. Commerce is due to issue a separate, preliminary ruling in July on an antidumping investigation into Chinese graphite imports. Final determinations for both investigations are expected to be issued in December, 2025. Mining Operations Northern's mining projects create a competitive advantage in terms of both current production and the ability to increase output in a relatively quick, modular, low-cost manner by leveraging existing permitting and infrastructure at both LDI and Okanjande. Lac des Iles Mine - Quebec The Company completed a two-month maintenance shutdown of the Lac des Iles processing plant in January as it continued efforts to boost mill output capacity and extend the mine life of its cornerstone asset in Quebec in the short-, medium- and long-term. LDI is the only producing graphite mine in North America, but the existing pit will be mined out and stockpiles used up by the fall of this year. The Company requires an investment of up to $10 million to extend the existing pit, based on a resource estimate published in January 2024 that showed potential to add approximately eight years to the current mine life. The Company continues to seek support from federal, provincial and US government agencies as well as EV and battery manufacturers but has not yet been successful. These efforts have been complicated by difficult financial markets, especially given the current share price. Because there is a lead time from an investment decision to production of approximately six months, the goal is to be able to break ground as soon as possible and ensure a continuous flow of ore to the plant. The new mineral resource estimate also supports the Company's intention to meet rising demand stimulated by EV sales, Chinese export controls and US tariffs on Chinese graphite. Northern is working to permanently move the LDI mill to a seven-days-per week operation, targeting annual nameplate capacity of 25,000 tonnes per year ("tpy"). Demand for LDI's high-quality graphite rose continuously through 2024 and into the first quarter of 2025. It commanded record-high average prices in the January-through-March period, up 37 percent versus the first quarter of last year. LDI processing and production volumes were hampered in the quarter by the mill and mine restart, weather conditions and high strip ratios but began to improve in the second quarter. On the resource front, Northern completed an additional drilling program in the fourth quarter with the objective of further identifying and expanding LDI resources with a lower strip ratio. Core logging and data compilation have been delayed due to the financial constraints the Company is experiencing. Longer-term, LDI has the potential to further extend its life by developing its Mousseau project, which is located approximately 80 km away and represents Northern's fourth significant graphite project along with LDI, Bissett Creek in Ontario and Okanjande in Namibia. The Company is also exploring other avenues to grow production and on April 2 announced an agreement with Graphano Energy Ltd. ("Graphano") to share technical knowledge and expertise to further the exploration and development of their respective properties. The agreement covers the LDI graphite mine and processing facility and Graphano's Lac Aux Bouleaux ("LAB") and Standard properties. The LAB Property is contiguous to the LDI graphite mine and covers the southern extensions of the productive graphite horizons, and the Standard property is between Northern's Mousseau exploration project and the LDI plant. All exploration costs will continue to be borne by the owners of each property. Okanjande Project - Namibia The Okanjande project in Namibia, which has been on care and maintenance since the third quarter of 2023, represents an opportunity to substantially increase graphite production at a lower cost and with a shorter time to market than most competing projects. The project has easy maritime access to European and North American markets and can be used to supply Northern's planned Battery Anode Material facilities in France and at Baie-Comeau, Quebec. Northern continues to evaluate options to fund the Okanjande project through the use of a royalty/stream/debt structure and equity contributed by a strategic partner without having to go to the market at current share prices. A technical report in respect of a preliminary economic assessment ("PEA") for the Okanjande project prepared in accordance with NI 43 101 was filed under the Company's profile on SEDAR+ ( on August 28, 2023. The PEA indicated that the economics are attractive under a plan to move the processing plant from Okorusu to the mine site with higher capital costs but lower operating costs. In addition, greenhouse gas emissions are reduced, sustainability is improved, and the expansion potential of the project is substantially enhanced. The Company plans to restart Okanjande in early 2027, pending financing, to coincide with plans to supply its proposed processing facility in France. With the resumption of production at the Okanjande Project, Northern would become one of the world's largest non-Chinese natural graphite producers. Mine-to-Market-Battery Strategy Northern continued in the quarter to advance its strategy to become one of the world's few integrated producers of natural graphite-based battery anode material outside of China. In March, the Company's proposal to build a BAM facility in France using graphite concentrate from its Okanjande project in Namibia, was granted "Strategic Project" status under the European Union's Critical Raw Materials Act ("CRMA"). The designation enhances its credibility and visibility, will help to accelerate timelines, facilitates faster permitting and improves access to financing while ensuring compliance with the highest environmental and social standards. The designation came barely a year after Northern launched its Battery Materials division ("NGCBM") to lead the Company's downstream expansion. The proposed French facility, requiring an estimated investment of €159 million, is targeted to begin operations in 2028 with an initial capacity of 20,000 tonnes per year of battery-grade anode material. Northern is currently in active discussions with potential off-take partners for its initial production. The mining of graphite at Okanjande is not covered under the scope of the Strategic Project, although Northern intends to file a subsequent proposal that will include extraction activities at the Namibia site. NGCBM also advanced its plans to build a BAM facility in Baie-Comeau, Québec, announcing in April a collaboration with The BMI Group to evaluate a brownfield site at a former paper mill that could accelerate permitting and construction timelines as well as reduce capex compared to the previously announced greenfield alternative. Battery anode material is the single largest component of lithium-ion batteries and is made by upgrading graphite mine concentrate to the exacting specifications of EV battery manufacturers. Northern's planned BAM facilities are intended to address this critical need that is currently missing from the energy transition supply chain in the West. Independent testing has determined that graphite from all of Northern's assets, which are all located close to infrastructure and in politically stable jurisdictions, is battery grade. The Company is also pursuing opportunities to move downstream into non-EV applications in the electronics, construction, graphene and hydrogen fuel cell markets. These markets provide the opportunity to increase revenues and profits through further processing of the Company's graphite mine concentrates. Balance Sheet and Corporate Update Northern continues to report as current liabilities its senior secured loan ($26.1 million) and its royalty financing ($15.8 million) as a result of the Company not meeting certain covenants related to these instruments. The lender and royalty holder have waived all defaults as of May 29, 2025 effective March 31, 2025, and discussions continue with the parties relating to amending the terms of the senior secured loan and royalty financing to better align with project timelines that have shifted with markets that are evolving at a slower pace than forecast. While discussions continue, the lender and royalty holder are supportive of Northern's growth plans and keen to work with the Company to find ways to capitalize on the new resource and extended mine life potential at LDI and allow the Company to benefit from a strong industrial market for graphite in North America as well as coming demand from EV markets. Going forward, the Company intends to maintain strict overhead cost controls that were implemented in 2024, as well as consider a number of other strategies until support for the only operating graphite mine in North America materializes or equity markets improve. The Company also continues to seek support from federal, provincial, US and European government agencies as well as EV and battery manufacturers. Closing Remarks "There's been a clear shift in the global critical minerals narrative, and graphite — as the essential material in lithium-ion batteries — is starting to gain the strategic recognition it deserves as governments in the West look to reduce dependency on Chinese supply chains for critical battery inputs by implementing tariffs or subsidies or strategic raw materials acts," said Mr. Jacquemin. "This is being reflected in customer demand for our graphite and the record prices we realized in the first quarter, and it's only a matter of time before capital markets reflect the reality on the ground. Northern Graphite is positioning itself for that turn by building a company that can deliver an integrated, secure, and local graphite supply chain solution for our customers in Europe and North America , from mine to battery, and from resource to resilience." About Northern Graphite Northern, the only flake graphite producing company in North America, is a Canadian, TSX Venture Exchange listed company that is focused on becoming a world leader in producing natural graphite and upgrading it into high-value products critical to the green economy, including anode material for lithium-ion batteries/EVs, fuel cells and graphene, as well as advanced industrial technologies. The Company's mine-to-battery strategy is spearheaded by its Battery Materials Division, which has a fully equipped, state-of-the-art laboratory in Frankfurt and is focused on developing advanced anode materials to improve the cycle life and increase the charging rate of lithium ion batteries. Northern's graphite assets include the producing Lac des Iles mine in Quebec where the Company plans to increase production to meet growing demand from industrial customers and coming demand from North American battery makers. The Company also owns the large-scale, advanced stage Bissett Creek project in Ontario, the Mousseau Project in Quebec and the fully permitted Okanjande graphite mine in Namibia that is currently on care and maintenance. All projects have "battery quality" graphite and are located close to infrastructure in politically stable jurisdictions. For media inquiries, contactPav Jordan, VP of CommunicationsEmail: pjordan@ For further information, contactNiall Moore, CFOTelephone: (613) 271-2124Email: info@ Qualified PersonGregory Bowes, MBA the Chairman of Northern, is a "qualified person" as defined under NI 43-101 and has reviewed and approved the content of this news release. For additional informationPlease visit the Company's website at the Company's profile on our Social Channels listed below or contact the Company at (613) 271-2124. LinkedInYouTubeXFacebook Cautionary Note Regarding Non-IFRS Performance Measures This news release includes certain non-IFRS performance measures that do not have a standardized meaning prescribed by International Financial Reporting Standards ("IFRS"). The Company believes that these measures, in addition to measures prepared in accordance with IFRS, provide investors with an improved ability to evaluate the underlying performance of the Company and to compare it to information reported by other companies. The non-IFRS measures are intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. These measures do not have any standardized meaning prescribed under IFRS, and therefore may not be comparable to other issuers. The calculation and an explanation of these measures is provided in the Company's Management's Discussion and Analysis and such measures should be read in conjunction with the Company's Management's Discussion and Analysis and financial statements. Cautionary Note Regarding Forward-Looking Statements This news release contains certain "forward-looking statements" within the meaning of applicable Canadian securities laws. 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 in this news release include statements regarding, among others, plans for extending the mine life and increasing output at LDI, bringing the Company's Namibian operations back online, advancing other developments projects to production, developing the capacity to manufacture value added products and raising the financing to complete any or all of these initiatives. All such forward-looking statements are based on assumptions and analyses made by management based on their experience and perception of historical trends, current conditions and expected future developments, as well as other factors they believe are appropriate in the circumstances. However, these statements are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected including, but not limited to, unexpected changes in laws, rules or regulations, or their enforcement by applicable authorities; the failure of other parties to perform as agreed; social or labour unrest; changes in commodity prices; unexpected failure or inadequacy of infrastructure and the failure of ongoing and contemplated studies to deliver anticipated results or results that would justify and support continued studies, development or operations, and the inability to raise the required financing. Readers are cautioned not to place undue reliance on forward-looking information or statements. 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. Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this press release. 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3 days ago
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Northern Graphite Announces First Quarter 2025 Results
Record-High Average Sales Prices, Volumes Impacted by Maintenance Shutdown France/Namibia BAM Project Wins "Strategic" Status Under EU Critical Raw Material Act Mill Maintenance Completed at Lac des Iles Mine Ottawa, Ontario--(Newsfile Corp. - May 30, 2025) - Northern Graphite Corporation (TSXV: NGC) (OTCQB: NGPHF) (FSE: 0NG) (XSTU:0NG) (the "Company" or "Northern") is pleased to provide an operating summary and financial highlights for the three month period ending March 31, 2025. The Company's Financial Statements and Management's Discussion and Analysis for the period have been filed on SEDAR+ and posted to the Company website. "In a challenging market environment, Northern Graphite is pushing forward on its growth catalysts. Our Battery Materials Division marked its one-year anniversary by winning 'Strategic Project' status under the EU's Critical Raw Materials Act for a proposal to build a BAM facility in France. This recognition reinforces our broader strategy to build a fully integrated, mine-to-market company supplying processed natural graphite to the lithium-ion battery sector," said Chief Executive Officer Hugues Jacquemin. "At our Lac des Iles ("LDI") mine, we are continuing strict cost controls to preserve cash and working to boost output and satisfy more customer demand than we can currently supply. While commanding record average sales prices for our graphite, cutting costs and increasing income from operations, we completed a major maintenance shutdown in Q1. At the same time, we have yet to secure financing to extend the LDI pit and add about eight years of life to the mine before it runs out of ore by the end of this year. As global markets continue to evolve, we remain flexible, focused, and ready to pivot where necessary to drive our vision forward." To view an enhanced version of this graphic, please visit: Operational Highlights: Driving Battery Strategy The Company experienced strong demand through the first quarter of the year, even amid geopolitical uncertainty and after negotiating higher pricing with customers for 2025; Production for the quarter was hampered by a mill maintenance shutdown completed in mid-January and by a lack of ore availability, however it began to improve in the second quarter; A year after its launch, the NGC Battery Materials division ("NGCBM") achieved some important milestones: On March 31, 2025, the Company announced that its proposal to upgrade graphite from the Okanjande project in Namibia into Battery Anode Material ("BAM") in France was selected as one of 47 Strategic Projects under the European Union's Critical Raw Materials Act ("CRMA"); The Company advanced plans to build a BAM plant in Baie-Comeau with an agreement with The BMI Group to evaluate the feasibility of a brownfield facility at a former paper mill which could reduce overall capex and time to market; In January, the Company began providing samples of three standard BAM products made from LDI graphite and according to the requirements of leading battery makers; The Company announced key management changes in the quarter, appointing Maximillian Meier as Chief Operating Officer and Michael Grimm, the President of Northern's Battery Materials Division, as Chief Commercial Officer; and The Company is in ongoing, active discussions with various government organizations at the federal and provincial level, and internationally, to gain support for its projects and to speed up development of the battery anode supply chain. Financial Highlights: The Company realized record-high average sales prices in the first quarter of $2,550 per tonne (US$1,776 per tonne), 37% above the first quarter of 2024, mainly due to price increases implemented in 2025 and a product mix that included a higher percentage of higher priced flake sizes. This favorable trend is continuing into the second quarter; Revenue fell 27% in the quarter to $4.0 million, based on 1,585 tonnes of graphite concentrate sold. This represents a 47% decrease in volume compared to the first quarter of 2024 as sales were negatively impacted by a maintenance shutdown and production issues after the restart in mid-January; Cash costs of $1,797 (US$1,252) per tonne of graphite concentrate sold increased by 10% compared to costs of $1,628 per tonne (US$1,207) in the first quarter of 2024, primarily due to changes in the sales mix that resulted in more, higher-cost inventory being sold in the 2025 quarter and higher mine and plant costs per tonne produced; Income from mine operations of $0.3 million, compared to a loss from mine operations of $0.5 million during the prior year's first quarter; General and administrative expenses during the first quarter of 2025 increased to $2.5 million versus $2.3 million in the first quarter of 2024, primarily due to legal expenditures and costs related to NGCBM which was just starting up in the prior year period, but were partially offset by the impact of strict overhead cost control measures and lower Namibian costs; During the fourth quarter of 2024 the Company placed the LDI plant and mine under a temporary shutdown for maintenance and repairs and resumed mining and milling operations in mid-January 2025. Costs incurred during the first quarter of 2025 during the shutdown were $0.4 million. During the first quarter of 2024, the LDI mine was on shutdown with costs of $0.6 million. These amounts were recorded in the condensed interim consolidated statements of loss and other comprehensive loss as care and maintenance expenses; The Okanjande plant was temporarily placed in care and maintenance in the third quarter of 2023. Holding costs of $0.3 million incurred during the first quarter of 2025 (2024 - $0.5 million) were recorded in the condensed interim consolidated statements of loss and other comprehensive loss as care and maintenance expenses; Finance costs were $3.2 million in the quarter (2024 - $3.1million). They increased as the impact of higher accretion rates were only partially offset by gains on a revaluation of the Company's royalty liability and senior debt of $0.2 million and $0.2 million, respectively, due to modifications to the anticipated timing of royalty and interest payments. Almost all of the finance costs were non-cash items; A net loss of $5.3 million ($0.04 per share) which included significant non-cash charges relating to depletion and depreciation, finance costs, impairment expenses and drawdown of inventories. Cash used in operating activities was $0.3 million, compared to 0.4 million used in the fourth quarter of 2024; As of March 31, 2025, in line with previous quarters, the Company continued to report its senior secured loan ($26.1 million) and its royalty financing ($15.8 million) as current liabilities as the Company has not met the following covenants related to these instruments: Senior secured loan - As at March 31, 2025, the Company had not paid accrued interest of $3.5 million (US$2.5 million), maintained, at all times, on a consolidated basis, positive working capital, and maintained, at all times, on a consolidated basis, a minimum cash balance of US$750,000; Royalty Financing - As at March, 2025, the Company had not paid royalty amounts with respect to 2024 totaling $2.9 million (US$2.0 million), and has not paid royalty amounts with respect to the first quarter of 2025 of $0.5 million (US$0.4 million) which were due on April 30, 2025; The Company's lender and royalty holder have waived all defaults as of May 29, 2025 effective March 31, 2025. Discussions continue with respect to amending the terms of the senior secured loan and royalty financing to better align them with project timelines that have shifted with markets that are evolving at a slower pace than forecast; The Company's working capital optimization efforts on inventories and receivables offset by the above noted senior debt and royalty classification to current liabilities ($41.8 million in total), resulted in a negative working capital balance of $41.2 million as at March 31, 2025. To view an enhanced version of this graphic, please visit: Northern is advancing toward its goal of becoming a vertically integrated, mine-to-market supplier to traditional downstream customers and to the emerging market for battery anode material. The Company's strategy is to expand production at its Lac des Iles ("LDI") mine, resume and expand production at the Okanjande project in Namibia, advance the Bissett Creek and the Mousseau projects towards development, develop downstream capacity to produce anode material for use in LiBs and EVs in North America and Europe and upgrade graphite mine concentrate into value added industrial products. Market Commentary Amid ongoing geopolitical uncertainty, trade turbulence, and supply chain pressures that continue to underscore the need for secure and diversified sources of graphite, industrial demand for the Company's graphite products remained strong through the first quarter as Northern sold LDI graphite at record-high average prices. This demand trend is expected to continue through 2025, even amid trade tariffs introduced by the administration of US President Donald Trump and with price increases implemented in January of this year. Under the terms of the United States-Mexico-Canada Agreement (USMCA), graphite from Canada remains exempt from new tariffs and Northern's customers have not experienced any negative tariff-related impacts to date. Northern is a key supplier of graphite to U.S. industrial markets, which account for approximately 85 percent of sales. With an estimated 20 percent share of U.S. industrial markets, Northern continues to benefit from strong demand in the refractory industry, where graphite is essential in the production of crucibles, casting molds, and blast furnace linings. Large and jumbo flake graphite — critical to these applications — has become increasingly scarce after China, the dominant producer of graphite, reduced mining activity due to elevated inventories of anode material, effectively removing much of its large-flake supply from the market. At the same time, supply from Western producers was constrained in the quarter by operational challenges, compounding tight global markets. Longer-term, the momentum behind graphite and critical minerals is building, and the Company is actively engaging with governments from the United States and Canada to the European Union as they map out strategies to ensure stable and sustainable supply chains. In early May, Northern participated in high-level discussions with industry and government policymakers in Washington and in Paris where discussions were led by French President Emmanuel Macron. The global industry is especially attuned to developments in U.S. trade policy as the administration of President Trump continues to shape the critical minerals landscape with its evolving tariff regime. In a move that could eventually boost demand for North America-sourced natural and synthetic graphite, on May 20 the U.S. Department of Commerce announced a preliminary decision to impose tariffs of up to 721% on imports of natural and artificial graphite active anode material ("AAM") — used to produce lithium-ion battery anode material — from China after investigating allegations that China is subsidizing production and supply of AAM to the United States. While preliminary, the decision sets the stage for meaningful anti-subsidy duties on Chinese graphite active anode material and marks a major step toward leveling the playing field and creating local demand. Commerce is due to issue a separate, preliminary ruling in July on an antidumping investigation into Chinese graphite imports. Final determinations for both investigations are expected to be issued in December, 2025. Mining Operations Northern's mining projects create a competitive advantage in terms of both current production and the ability to increase output in a relatively quick, modular, low-cost manner by leveraging existing permitting and infrastructure at both LDI and Okanjande. Lac des Iles Mine - Quebec The Company completed a two-month maintenance shutdown of the Lac des Iles processing plant in January as it continued efforts to boost mill output capacity and extend the mine life of its cornerstone asset in Quebec in the short-, medium- and long-term. LDI is the only producing graphite mine in North America, but the existing pit will be mined out and stockpiles used up by the fall of this year. The Company requires an investment of up to $10 million to extend the existing pit, based on a resource estimate published in January 2024 that showed potential to add approximately eight years to the current mine life. The Company continues to seek support from federal, provincial and US government agencies as well as EV and battery manufacturers but has not yet been successful. These efforts have been complicated by difficult financial markets, especially given the current share price. Because there is a lead time from an investment decision to production of approximately six months, the goal is to be able to break ground as soon as possible and ensure a continuous flow of ore to the plant. The new mineral resource estimate also supports the Company's intention to meet rising demand stimulated by EV sales, Chinese export controls and US tariffs on Chinese graphite. Northern is working to permanently move the LDI mill to a seven-days-per week operation, targeting annual nameplate capacity of 25,000 tonnes per year ("tpy"). Demand for LDI's high-quality graphite rose continuously through 2024 and into the first quarter of 2025. It commanded record-high average prices in the January-through-March period, up 37 percent versus the first quarter of last year. LDI processing and production volumes were hampered in the quarter by the mill and mine restart, weather conditions and high strip ratios but began to improve in the second quarter. On the resource front, Northern completed an additional drilling program in the fourth quarter with the objective of further identifying and expanding LDI resources with a lower strip ratio. Core logging and data compilation have been delayed due to the financial constraints the Company is experiencing. Longer-term, LDI has the potential to further extend its life by developing its Mousseau project, which is located approximately 80 km away and represents Northern's fourth significant graphite project along with LDI, Bissett Creek in Ontario and Okanjande in Namibia. The Company is also exploring other avenues to grow production and on April 2 announced an agreement with Graphano Energy Ltd. ("Graphano") to share technical knowledge and expertise to further the exploration and development of their respective properties. The agreement covers the LDI graphite mine and processing facility and Graphano's Lac Aux Bouleaux ("LAB") and Standard properties. The LAB Property is contiguous to the LDI graphite mine and covers the southern extensions of the productive graphite horizons, and the Standard property is between Northern's Mousseau exploration project and the LDI plant. All exploration costs will continue to be borne by the owners of each property. Okanjande Project - Namibia The Okanjande project in Namibia, which has been on care and maintenance since the third quarter of 2023, represents an opportunity to substantially increase graphite production at a lower cost and with a shorter time to market than most competing projects. The project has easy maritime access to European and North American markets and can be used to supply Northern's planned Battery Anode Material facilities in France and at Baie-Comeau, Quebec. Northern continues to evaluate options to fund the Okanjande project through the use of a royalty/stream/debt structure and equity contributed by a strategic partner without having to go to the market at current share prices. A technical report in respect of a preliminary economic assessment ("PEA") for the Okanjande project prepared in accordance with NI 43 101 was filed under the Company's profile on SEDAR+ ( on August 28, 2023. The PEA indicated that the economics are attractive under a plan to move the processing plant from Okorusu to the mine site with higher capital costs but lower operating costs. In addition, greenhouse gas emissions are reduced, sustainability is improved, and the expansion potential of the project is substantially enhanced. The Company plans to restart Okanjande in early 2027, pending financing, to coincide with plans to supply its proposed processing facility in France. With the resumption of production at the Okanjande Project, Northern would become one of the world's largest non-Chinese natural graphite producers. Mine-to-Market-Battery Strategy Northern continued in the quarter to advance its strategy to become one of the world's few integrated producers of natural graphite-based battery anode material outside of China. In March, the Company's proposal to build a BAM facility in France using graphite concentrate from its Okanjande project in Namibia, was granted "Strategic Project" status under the European Union's Critical Raw Materials Act ("CRMA"). The designation enhances its credibility and visibility, will help to accelerate timelines, facilitates faster permitting and improves access to financing while ensuring compliance with the highest environmental and social standards. The designation came barely a year after Northern launched its Battery Materials division ("NGCBM") to lead the Company's downstream expansion. The proposed French facility, requiring an estimated investment of €159 million, is targeted to begin operations in 2028 with an initial capacity of 20,000 tonnes per year of battery-grade anode material. Northern is currently in active discussions with potential off-take partners for its initial production. The mining of graphite at Okanjande is not covered under the scope of the Strategic Project, although Northern intends to file a subsequent proposal that will include extraction activities at the Namibia site. NGCBM also advanced its plans to build a BAM facility in Baie-Comeau, Québec, announcing in April a collaboration with The BMI Group to evaluate a brownfield site at a former paper mill that could accelerate permitting and construction timelines as well as reduce capex compared to the previously announced greenfield alternative. Battery anode material is the single largest component of lithium-ion batteries and is made by upgrading graphite mine concentrate to the exacting specifications of EV battery manufacturers. Northern's planned BAM facilities are intended to address this critical need that is currently missing from the energy transition supply chain in the West. Independent testing has determined that graphite from all of Northern's assets, which are all located close to infrastructure and in politically stable jurisdictions, is battery grade. The Company is also pursuing opportunities to move downstream into non-EV applications in the electronics, construction, graphene and hydrogen fuel cell markets. These markets provide the opportunity to increase revenues and profits through further processing of the Company's graphite mine concentrates. Balance Sheet and Corporate Update Northern continues to report as current liabilities its senior secured loan ($26.1 million) and its royalty financing ($15.8 million) as a result of the Company not meeting certain covenants related to these instruments. The lender and royalty holder have waived all defaults as of May 29, 2025 effective March 31, 2025, and discussions continue with the parties relating to amending the terms of the senior secured loan and royalty financing to better align with project timelines that have shifted with markets that are evolving at a slower pace than forecast. While discussions continue, the lender and royalty holder are supportive of Northern's growth plans and keen to work with the Company to find ways to capitalize on the new resource and extended mine life potential at LDI and allow the Company to benefit from a strong industrial market for graphite in North America as well as coming demand from EV markets. Going forward, the Company intends to maintain strict overhead cost controls that were implemented in 2024, as well as consider a number of other strategies until support for the only operating graphite mine in North America materializes or equity markets improve. The Company also continues to seek support from federal, provincial, US and European government agencies as well as EV and battery manufacturers. Closing Remarks "There's been a clear shift in the global critical minerals narrative, and graphite — as the essential material in lithium-ion batteries — is starting to gain the strategic recognition it deserves as governments in the West look to reduce dependency on Chinese supply chains for critical battery inputs by implementing tariffs or subsidies or strategic raw materials acts," said Mr. Jacquemin. "This is being reflected in customer demand for our graphite and the record prices we realized in the first quarter, and it's only a matter of time before capital markets reflect the reality on the ground. Northern Graphite is positioning itself for that turn by building a company that can deliver an integrated, secure, and local graphite supply chain solution for our customers in Europe and North America , from mine to battery, and from resource to resilience." About Northern Graphite Northern, the only flake graphite producing company in North America, is a Canadian, TSX Venture Exchange listed company that is focused on becoming a world leader in producing natural graphite and upgrading it into high-value products critical to the green economy, including anode material for lithium-ion batteries/EVs, fuel cells and graphene, as well as advanced industrial technologies. The Company's mine-to-battery strategy is spearheaded by its Battery Materials Division, which has a fully equipped, state-of-the-art laboratory in Frankfurt and is focused on developing advanced anode materials to improve the cycle life and increase the charging rate of lithium ion batteries. Northern's graphite assets include the producing Lac des Iles mine in Quebec where the Company plans to increase production to meet growing demand from industrial customers and coming demand from North American battery makers. The Company also owns the large-scale, advanced stage Bissett Creek project in Ontario, the Mousseau Project in Quebec and the fully permitted Okanjande graphite mine in Namibia that is currently on care and maintenance. All projects have "battery quality" graphite and are located close to infrastructure in politically stable jurisdictions. For media inquiries, contactPav Jordan, VP of CommunicationsEmail: pjordan@ For further information, contactNiall Moore, CFOTelephone: (613) 271-2124Email: info@ Qualified PersonGregory Bowes, MBA the Chairman of Northern, is a "qualified person" as defined under NI 43-101 and has reviewed and approved the content of this news release. For additional informationPlease visit the Company's website at the Company's profile on our Social Channels listed below or contact the Company at (613) 271-2124. LinkedInYouTubeXFacebook Cautionary Note Regarding Non-IFRS Performance Measures This news release includes certain non-IFRS performance measures that do not have a standardized meaning prescribed by International Financial Reporting Standards ("IFRS"). The Company believes that these measures, in addition to measures prepared in accordance with IFRS, provide investors with an improved ability to evaluate the underlying performance of the Company and to compare it to information reported by other companies. The non-IFRS measures are intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. These measures do not have any standardized meaning prescribed under IFRS, and therefore may not be comparable to other issuers. The calculation and an explanation of these measures is provided in the Company's Management's Discussion and Analysis and such measures should be read in conjunction with the Company's Management's Discussion and Analysis and financial statements. Cautionary Note Regarding Forward-Looking Statements This news release contains certain "forward-looking statements" within the meaning of applicable Canadian securities laws. 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 in this news release include statements regarding, among others, plans for extending the mine life and increasing output at LDI, bringing the Company's Namibian operations back online, advancing other developments projects to production, developing the capacity to manufacture value added products and raising the financing to complete any or all of these initiatives. All such forward-looking statements are based on assumptions and analyses made by management based on their experience and perception of historical trends, current conditions and expected future developments, as well as other factors they believe are appropriate in the circumstances. However, these statements are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected including, but not limited to, unexpected changes in laws, rules or regulations, or their enforcement by applicable authorities; the failure of other parties to perform as agreed; social or labour unrest; changes in commodity prices; unexpected failure or inadequacy of infrastructure and the failure of ongoing and contemplated studies to deliver anticipated results or results that would justify and support continued studies, development or operations, and the inability to raise the required financing. Readers are cautioned not to place undue reliance on forward-looking information or statements. 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. Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this press release. To view the source version of this press release, please visit
Euronews
5 days ago
- Business
- Euronews
Trash is cash: ‘urban mining' for strategic metals in your neighbourhood
The old smartphone hiding in your drawer probably holds tiny portions of lithium, cobalt, and rare-earth metals. It is estimated that 700 million old phones are lying around in Europe. The concept known as "urban mining" involves finding materials in existing products, as opposed to "primary" mining where ground resources are exploited. The EU has made it a priority to secure supply chains for the raw materials that are essential for green and digital technologies. Dozens of them have been classified as "critical" and "strategic" by the European Commission. However, 90% of these elements are currently imported from abroad. According to EU data, around 1% of the valuable materials consumed in the EU come from recycling. The Critical Raw Materials Act, adopted in 2024, has set a target of reaching 25% by 2030. The Commission's objectives is to boost the recycling of electric waste, one of the fastest-growing waste streams. In each member state, organisations are responsible for collecting and transporting e-waste to the continent's 2,700 processing facilities. The recycling facilities are expected to meet a growing share of the demand from European foundries, which traditionally source their supplies from other continents, such as Asia. Several challenges persist: from the profitability of extracting the smallest parts of materials, to "electronic hibernation": According to a study, each European family has on average 74 electronic devices, 13 of which are unused but hoarded for various reasons, data privacy concerns being one of them. The EU Commission is due to present a new Circular Economy Act in 2026 to foster the competitiveness of circular models in various sectors such as construction and demolition. This accounts for 40% of the total waste weight in the EU, mainly traditional raw materials such as concrete, aluminum, steel, and glass, which, again, are often imported. While much of the demolished concrete is considered recycled, it is actually crushed for use as an aggregate base, for example in road construction. More and more technologies are enabling recycling rather than downcycling. Emerging techniques are transforming old blocks into high-quality concrete. Furthermore, many leftover materials such as plastics and wood are often not recovered and are sent to incineration or landfill. New sorting techniques are helping to increase the recycling rate. Another trend is the reuse of materials. Elements such as concrete blocks, windows, and bricks can be dismantled for reuse. A more modular design of buildings can also allow for greater circularity. Some countries have already adopted an approach aimed at requiring inventories of the materials present in buildings before any demolition. Like the reuse and repair of electronics, building renovation remains a better solution than demolition in terms of environmental impact, according to experts. According to the European Environment Agency (EEA), 20-25% of the life cycle emissions of the current EU building stock are embedded in building materials. Circular economy-based approaches to renovation can help reduce embedded greenhouse gas emissions. 'We have a lot of policy already, what we need is to get the economics right', European Commissioner for the Environment Jessika Roswall told Euronews. Roswall is the architect of the EU Commission's future Circular Economy Act, which is to succeed the Circular Economy Action Plan (CEAP) adopted five years ago. The initiative should include updating existing rules to foster 'circular competitiveness' and boost the EU's recycling rate. In 2022, only 12% of products consumed came from recycling. The plan could include a revision of the WEEE (Waste from Electrical and Electronic Equipment) Directive, which governs the rules and targets for the collection and treatment of e-waste, from small batteries to photovoltaic panels. In almost 20 years, the WEEE Directive has led to a tenfold increase in the amount of e-waste recovered and properly treated in the EU, but not all member states have achieved the targets set. Quantities of WEEE are still not collected, improperly treated or illegally exported. The EU wants to increase the proportion of recovered materials in order to reduce the proportion of virgin materials imported for new electrical and electronic equipment. The Circular Economy Act should focus on the recovery of critical raw materials. This strategy is presented as a means of strengthening the EU's economic security against a backdrop of international trade tensions. 'The circularity numbers are too low. This geopolitical situation must be the time when we actually go circular', Commissoner Roswall told Euronews. In 2024, the EU adopted the Critical Raw Materials Act (CRM Act), which is intended to strengthen the EU's security of supply of a series of metals and other components essential to the green and digital transitions. The European Union has drawn up a regularly updated list of materials considered 'critical', such as rare-earth metals, copper or cobalt, and another of materials considered 'strategic', such as bismuth and magnesium metal. The EU's objective is to achieve a recycling rate of 25% of CRMs, compared with around 1% today. This requires investment in the necessary infrastructure as part of the Clean Industrial Deal presented last year. The circular economy should also apply to other sectors of the economy, such as construction, textiles and the automotive industry. The Act in preparation is set to provide for the revision of the Waste Framework Directive and promote the creation of a 'common market for waste'. Despite efforts at harmonisation, the existing fragmentation between national requirements, as in the case of Extended Producer Responsibility (EPR) systems, raises problems of competition and costs. An intra-EU waste market is wanted by Brussels, which conversely recently tightened the rules against the export of waste outside the EU. 'We need to change our mindset and see waste as an asset', Roswall added, specifying that she also considered water as waste. The EU recently strengthened its legislation on urban wastewater. It plans to maximise the reuse of water for irrigation in the continent's largest treatment stations. Alongside recycling, the EU is also encouraging the extension of product lifetimes. The Ecodesign for Sustainable Products Regulation (ESPR) entered into force in 2024, and is aimed at creating economic opportunities in remanufacturing, recycling or repair. The European Commission has put forward the concept of a 'right to repair', in the form of incentives to make repairing products easier and more attractive, in order to reduce waste. A directive aimed at 'Empowering consumers for the green transition' was also adopted to offer consumers better information on the products durability. According to a 2020 survey, 77% of Europeans said they would rather repair their goods, but had to buy new ones because of the lack of repair services.
Fibre2Fashion
20-05-2025
- Automotive
- Fibre2Fashion
Finland's Fortum & Vianode partner on recycled graphite for EVs
Fortum Battery Recycling and Vianode have signed a Memorandum of Understanding under which the two companies will work together to: Fortum Battery Recycling and Vianode have signed an MoU to develop recycled graphite for EV batteries. Fortum will supply graphite from its hydrometallurgical plant, while both firms will optimise its use in anode production. The partnership aims to cut carbon emissions, reduce reliance on virgin materials, and support EU goals for sustainable battery value chains. Secure supplies of high-quality recycled graphite concentrate from Fortum's hydrometallurgical plant in Harjavalta, Finland Develop and optimize recycled graphite materials for use in Vianode's commercial-scale anode production Evaluate and enhance the performance of recycled graphite in advanced battery components 'Fortum Battery Recycling and Vianode have a shared commitment to a more sustainable and less resource-intensive EV battery industry. By recovering valuable and critical graphite from used batteries and returning it to the cycle as battery-grade material, we help enable the production of new lithium-ion batteries with a significantly lower environmental footprint,' says Tero Holländer at Fortum Battery Recycling. "Recycling graphite from end-of-life batteries is vital to reduce dependence on virgin raw materials, lower carbon emissions, and build sustainable supply chains. Access to recycled graphite concentrate with potential to scale volumes over time will support Vianode's ambition to deliver high-quality anode materials with an industry-leading CO2 footprint below 1 kilogram CO2e per kilogram of graphite by 2030', says Dr. Stefan Bergold, Chief Commercial Officer of Vianode. Graphite anode material represents the largest component of lithium-ion batteries by weight, typically around 70 kilograms per EV. The majority of graphite used in EV batteries is synthetic graphite, of which around 90% is currently imported from China. Towards 2030, Europe is expected to see a significant increase in battery recycling as the first generation of EVs reaches the end of their life and new EU legislation requires higher recovery rates and the use of recycled materials in new batteries. Fortum Battery Recycling operates Europe's largest closed-loop hydrometallurgical battery recycling facility in Harjavalta, Finland. In March 2025, Fortum's Harjavalta facility was recognized by the European Commission as a Strategic Project as part of the implementation of the Critical Raw Materials Act (CRMA), aiming to ensure European production of raw materials needed for green transition. Note: The headline, insights, and image of this press release may have been refined by the Fibre2Fashion staff; the rest of the content remains unchanged. Fibre2Fashion News Desk (HU)
News.com.au
02-05-2025
- Business
- News.com.au
Monsters of Rock: Critical minerals stockpiles could herald golden age for rare metals (or just big warehouses)
Western governments are ramping up calls to stockpile critical minerals to compete with China But what impact will it actually have on market prices? Lithium leader Albemarle tips more pain for producers As Australia heads to the polls tomorrow, one policy from the Albanese government has caught the eye. Its $1.2 billion critical minerals stockpile, accompanied by another $1bn for the now $5bn critical minerals facility, is its flagship attempt to twist Trump's arm on tariffs and beat China at its own game in rare earths. The idea, which could put a floor under prices for new producers of things like rare earths, feels eerily similar to the hawkish tones of Labor stalwart Kim Beazley's rambling Diggers and Dealers address last year. Only, it seems the one company that should be consulted on something like this – the only one in Australia actually producing commercial quantities of rare earths – wasn't. "I have to say that I am at a loss to understand the policy,' Lynas (ASX:LYC) boss Amanda Lacaze said on the company's quarterly call this week. 'It's not going to suddenly make uneconomic projects economic. There is only $1.2bn in this fund. Even if you put half of that towards rare earths, well, that doesn't even cover Lynas' full year production. 'I cannot see how the government buying oxide is going to do anything except have the government needing to build a big warehouse.' But Australia is not the only company aiming to stockpile critical minerals, and analysts from ANZ think similar moves afoot in Canada and South Korea could dramatically reshape how markets like rare earths and copper are structured. The long game China has been stockpiling minerals strategically "for some time", ANZ's Daniel Hynes and Soni Kumari said. "Other countries now appear to be making similar moves. The US has, in recent years, moved to revitalise its national defence stockpile," they said in a note. "Australia has also raised the possibility of a critical mineral reserve, while Canada and South Korea have said they will stockpile rare earth minerals from new projects. "Although Europe does not have a formal strategic reserve of critical minerals, it has established the Critical Raw Materials Act to ensure access to a secure and sustainable supply. "The emergence of strategic reserves could sustain a period of stronger demand. This should put a floor under prices for critical minerals such as copper, lithium and cobalt. The faster governments add to stockpiles, the greater the risk of volatility and market destabilisation. However, the risks of not doing anything could be greater over the longer term." According to ANZ, WoodMac, Bloomberg and Macrobond data, inventory build has become a massive component of lithium, copper, aluminium and cobalt demand in China over to past six years. Copper runs close to 65%, while lithium hovers around 40% (though many lithium chemicals spoil and need to be used within a tight timeframe). The background for this is an increasingly staunch trade war between the US and China. China dominates the supply of critical minerals, including well over 80% of the rare earths supply chain and over 50% of lithium refining. Because it is the main consumer for raw and intermediate materials, it can use levers that set prices at levels the West can't compete at. Stockpiling can be one of those measures. Equally stockpiling by countries outside China could shield them against future export restrictions, like those China has placed on gallium, germanium, antimony and heavy rare earths. The US this week nailed its critical minerals deal with Ukraine, which reputedly holds Europe's largest (though as yet undeveloped) lithium reserves. At the same time, Hynes and Kumari say China's stockpiling practices could actually mitigate downside to commodity demand. "And this stockpiling appears to be a trend, not an aberration. Despite the accumulation, however, China's inventories do not appear to be excessive relative to its storage capacity," they said. "So we think imports will continue at a high level, which will go some way to mitigating the downside impact of a slowing global economy on commodity demand." Dislocations could result, though. Stockpiles are useful for governments because when prices are low they can soak up supply. But they then become an alternative source, which can cause volatility when those metals are released into the market. "A race to secure and control critical minerals has the potential to exacerbate geopolitical tensions, with trade disputes, resource nationalism and export restrictions leading to global supply-chain disruption and threats to national security," Hynes and Kumari said. "Current low prices offer an opportunity for governments to build national stockpiles, but that may be short-lived. Demand is expected to exceed supply across a range of markets by the end of the decade. That urgency will have to be managed, as the faster governments add to stockpiles, the greater the risk of volatility in prices and market destabilisation." Lithium struggles continue Overnight, the largest lithium producer in the world, America's Albemarle, delivered another downbeat take on the state of the sector. Boss J. Kent Masters estimates 40% of the market is losing money right now, with a third of those lossmaking operations now out of circulation. Lithium carbonate prices are hovering at their lowest ebb in the current down cycle at US$8700/t. In late 2022 they briefly surged to above US$80,000/t before a flood of supply from places like Africa, China and expansions in Australia came online. Cost-cutting measures helped Albemarle address last year's pain, with its first quarter net income up over 1600% to US$41.3m. Also continuing to stall a planned US$1.3bn lithium refinery in South Carolina – having also dramatically scaled back construction of a refinery in WA's Kemerton industrial precinct in 2024 – Masters said more producers will need to come out of the market in the short-term. That could exacerbate supply shortages with demand continuing to rise at more than 20% a year. "Prices well above current levels are required to support the necessary investment,' Masters said. The ASX 300 Metals and Mining index fell 0.36% over the past week.
