Canada’s NextSource is exploring the establishment of a battery anode facility (BAF) in Saudi Arabia, drawn by the kingdom’s attractive incentives for value-added processing.

The proposed facility aims to produce 20 000 t/y of coated spheronised purified graphite, with full production expected within just 16 months of breaking ground.

Stantec, in collaboration with NextSource’s technology partners, has planned the project, estimated to cost $280-million, with Middle East-compliant designs.

Initial economic projections indicate promising returns with an aftertax net present value (NPV) of $677-million and an internal rate of return (IRR) of 20.3%.

Future expansions could boost the facility’s capacity to 100 000 t/y, amplifying its economic impact. At this scale, the combined post-tax economic results estimated an NPV of $3.32-billion,  using an 8% discount rate, and an IRR of 23.7% with a payback within 6.3 years.

Yearly revenues at full capacity are forecast to amount to $1.09-billion.

The incremental capital costs to reach 100 000 t/y is estimated to be $864.8-million

The Saudi Arabia BAF will not only process graphite from the Molo mine, in Madagascar, but also offers opportunities for third-party processing.

NextSource president and CEO Craig Scherba said the BAF would align with Saudi Arabia’s Vision 2030 plan, which aims to modernise the economy and society by transforming the country into a global investment powerhouse, and as an international processing and manufacturing hub connecting three continents: Africa, Asia and Europe

“Developing a BAF in Saudi Arabia would position us to capitalise on the Kingdom's robust infrastructure, strategic location along shipping routes, and highly supportive business environment,” he said.

The construction of a proposed BAF in Saudi Arabia is part of the company’s global expansion strategy to construct BAFs in key geographic locations, each with modular production capacities, that can be expanded in lockstep with OEM demand.

Scherba said that NextSource continued to examine several potential locales to develop BAFs. Besides Saudi Arabia, these include Madagascar, the United Arab Emirates and North America.