Northern Graphite Targets 2028 Production With $200M Saudi Anode Project

Key Concepts

• Battery Anode Material (BAM): Materials, specifically graphite, used in the anode of lithium-ion batteries.
• Okanjandi Mine (Namibia): Northern Graphite’s graphite mine, supplying concentrate for the Saudi Arabian plant.
• Future Minerals Forum (FMF): A forum in Riyadh, Saudi Arabia, focused on mineral deals and investment in the critical minerals sector.
• Geopolitical Supply Chain: The increasing influence of geopolitical factors (US-China relations) on the sourcing and processing of critical minerals.
• Ex-China Pricing: The emerging price differentiation for critical minerals sourced outside of China.
• Jigafactory: A large-scale factory for the production of lithium-ion batteries.

Northern Graphite & Obe Group: $200 Million Battery Anode Material Plant in Saudi Arabia

This report details the announcement of a significant deal signed at the 2026 Future Minerals Forum (FMF) in Riyadh, Saudi Arabia: a $200 million joint venture between Northern Graphite and Obe Group to construct a battery anode material (BAM) plant. The agreement signifies a strategic move to diversify graphite processing capacity outside of China and secure supply chains for the burgeoning battery market.

Deal Specifics & Timeline

The agreement, formalized through a term sheet, outlines the following key details:

• Phase 1 Capacity: The plant will initially produce approximately 25,000 tons per year of BAM, with scalability planned for future expansion.
• Ownership Structure: Obe Group will hold a 51% stake, while Northern Graphite will own 49%.
• Graphite Supply: Northern Graphite will supply approximately 50,000 tons per year of graphite concentrate sourced from its Okanjandi mine in Namibia.
• Financing: Project debt financing will be sourced from the Saudi government, finance agencies, and both local and global commercial banks.
• Timeline: A final investment decision is targeted for the third quarter of 2026, with construction commencing thereafter and production anticipated by early 2028.

The Genesis of the Deal & Partner Selection

The deal originated from initial discussions between Northern Graphite and Obe Group at the 2025 FMF. A year-long process followed, focused on due diligence, material qualification, financing, and technology assessment. Hug Jackman, CEO of Northern Graphite, emphasized Obe Group’s suitability as a partner due to their existing lithium refining project in Saudi Arabia, their extensive infrastructure (3,000 employees, facilities in glass, paper, and packaging), and their experience in large-scale construction and operations. Jackman stated, “Obean really brings to the table…it’s a large company…they already have large facilities here in Saudi that we have been able to visit…and we are very confident that they will bring a lot to the party when it comes to the construction and the operation of the facility itself.”

Material Qualification & Technological Advancement

Northern Graphite has been proactively qualifying its Namibian graphite for battery applications since early 2024. This involved producing multiple generations of graphite products, utilizing production-scale equipment, and securing qualification from approximately 30 cell manufacturers globally. This rapid qualification process was a key factor in accelerating the deal.

Strategic Rationale: Saudi Arabia vs. Canada

Despite possessing graphite production assets in Canada (Lac-des-Îles mine in Quebec), Northern Graphite prioritized Saudi Arabia for its first BAM plant. Jackman explained this decision was driven by:

• Faster Project Development: Saudi Arabia offers a more accelerated development timeline compared to Canada.
• Cost Competitiveness: The location provides a favorable cost position.
• Synergy with Namibian Supply: The Saudi plant seamlessly integrates with graphite supply from the Okanjandi mine.
• Local Demand: Saudi Arabia’s ambitions to establish a domestic battery manufacturing industry create a readily available local market.
• Government Support: The Saudi government is actively supporting the project to foster local battery supply chains.

Jackman clarified that the Saudi plant will serve as a “model” for future facilities in other regions, including potentially Quebec, emphasizing a strategy of building three plants – one in each key region.

Okanjandi Mine Restart & Expansion

To support the Saudi Arabian plant, Northern Graphite is preparing to restart production at its Okanjandi mine in Namibia. This involves:

• Existing Infrastructure: Leveraging previously operational infrastructure (the mine operated from 2016-2018).
• Infrastructure Upgrades: Constructing a new tailings dam, adding power via a large solar farm, and upgrading existing equipment.
• Capacity Expansion: Increasing initial production capacity from 31,000 tons to 50,000 tons per year, with potential for further expansion to 150,000 tons per year. The mine possesses sufficient graphite resources to support this expansion.

Graphite Pricing & Market Dynamics

The discussion highlighted the emerging bifurcation in graphite pricing between China and “ex-China” sources. Recent data indicates that graphite prices in North America are approaching 100% of those in China, driven by supply chain security concerns. Northern Graphite anticipates securing favorable pricing through offtake agreements, benefiting from this trend. The agreement with Obe Group includes a back-to-back offtake arrangement from the JV to the Namibian mine, ensuring pricing transparency. Jackman noted, “There’s clear bifurcation and pricing between China and ex-China…and I feel very confident that we should be able to get the price that we need with our offtake agreements.”

Geopolitical Context & Supply Chain Security

The deal is occurring against a backdrop of increasing geopolitical tensions between the US and China regarding control of critical mineral resources. Saudi Arabia’s strategic location and relationships with both countries position it as a potential facilitator in diversifying supply chains. The increasing export controls imposed by China on specific graphite grades have further underscored the need for alternative sources.

Lithium Market Impact & Future Outlook

While the discussion focused on graphite, the role of lithium (supplied by Obe Group’s existing project) was acknowledged as crucial in battery production. The recent dip in lithium prices was noted as a temporary setback, but government initiatives in Canada, Saudi Arabia, and the US are expected to stimulate growth in the sector. Jackman expressed optimism about the long-term outlook, emphasizing the need for rapid development of ex-China supply chains.

Conclusion

The Northern Graphite-Obe Group joint venture represents a significant step towards diversifying the battery anode material supply chain and reducing reliance on China. The project’s strategic location, robust financing plan, and proactive material qualification process position it for success. The deal underscores the growing importance of geopolitical considerations and supply chain security in the critical minerals sector, and Saudi Arabia’s emergence as a key player in this evolving landscape. As Jackman concluded, “We just got to get on with it, get to the market before anybody else and have the lowest cost position outside of China.”