NOVONIX Limited (NOVONIX; NASDAQ: NVX, ASX: NVX), a leading battery
materials and technology company, and LG Energy Solution (LGES;
KRX: 373220), a global battery manufacturer, today announced they
signed an agreement for the joint research and development of
artificial graphite anode material for lithium-ion batteries. Also,
in a separate agreement, NOVONIX has agreed to issue an aggregate
principal amount of US$30 million unsecured convertible notes to
LGES.
Upon successful completion of certain development
work under the JDA, LGES and NOVONIX will enter into a separate
purchase agreement pursuant to which LGES will have the option to
purchase up to 50,000 tons of artificial graphite anode material
over a 10-year period from the start of mass production.
As a leading global battery manufacturer with two
stand-alone and five joint venture plants currently operating or
being constructed in the U.S., LGES plans to maximize the benefits
from the Inflation Reduction Act (IRA) by expanding local battery
production, as well as establishing a local supply chain for
battery components. In order to solidify its market leadership in
North America, LGES further aims to expedite the localization of
manufacturing and assembly of battery components, including
electrodes, cells, and modules.
NOVONIX aims to provide a robust, sustainable
supply chain option for high performance artificial graphite in
North America, a vision which LGES supports to diversify its
suppliers as it expands battery cell production. NOVONIX, with
current operating sites in Chattanooga, TN, will produce
IRA-compliant materials for its customers in the United States. The
company was selected for a US$150 million grant by the Department
of Energy to support its expansion, which demonstrates the
government’s commitment to the battery supply chain sector.
Since December 2022, LGES and NOVONIX have been in
informal discussions towards this financing and joint development
of artificial graphite anode material that meets LGES’s
specifications. The material will be developed at NOVONIX’s current
Tennessee-based facilities. Then mass production is expected to
start in 2026 from NOVONIX’s proposed United States-based
greenfield facility.
NOVONIX’s proposed greenfield facility targets an
initial 30,000 tons per annum of production capacity of active
anode material. NOVONIX has applied for a loan with the U.S.
Department of Energy’s Loan Program Office under the Advanced
Technology Vehicles Manufacturing Loan Program to aid in the
financing of the facility. NOVONIX continues to pursue and hold
discussions with additional original equipment manufacturers and
cell manufacturers for the purchase of anode materials from its
greenfield facility.
“Our partnership with NOVONIX once again
demonstrates LG Energy Solution’s determination to establish a
solid battery supply chain in the U.S., complementing our local
manufacturing network to meet our customers’ needs for
lRA-compliant batteries,” said Dongsoo Kim, Senior Vice President
of Procurement Center at LG Energy Solution. “As we work with
NOVONIX in developing a new source of artificial graphite anode
material, we will stay committed to strengthening our product
competitiveness and operation excellence, delivering the world-best
quality products both in scale and with speed.”
Chris Burns, CEO of NOVONIX, said, “We are excited
to formalize our work with LG Energy Solution and establish the
path for NOVONIX to become a supplier for LGES of artificial
graphite anode material in the United States. This agreement
demonstrates our leading position to establish a supply chain for
high-performance artificial graphite for the battery industry in
North America.”
Key JDA Terms
- The purpose of the
JDA is for the parties to jointly undertake the development of
active anode material that meets certain product quality
specifications, and the JDA shall be for a term through June 2025.
The material for testing will be supplied from NOVONIX’s pilot
plant in 2023 and its mass production facilities in 2024 and
2025.
- Any jointly
developed and owned intellectual property will be cross-licensed by
LGES and NOVONIX and its subsidiaries. Upon successful development
of materials, NOVONIX and LGES will enter into a purchase agreement
giving LGES the option to purchase up to 50,000 tons of artificial
graphite over 10 years, and if any volume increases are requested
by LGES, NOVONIX shall use its best efforts to meet the increased
volume. The parties have agreed to a pricing framework under which
the final product price will be mutually agreed upon as part of the
purchase agreement.
- The supply by
NOVONIX to LGES of the products developed under the JDA would
initially be subject to a six-year exclusivity period followed by a
preferential period of four years (during which any supply to a
third party would be subject to a minimum floor price tied to the
price offered to LGES).
Key Investment Agreement
Terms
- NOVONIX has agreed
to issue US$30 million worth of unsecured convertible notes to LGES
with a four percent coupon and a maturity date of June 7,
2028.
- The convertible
notes will mandatorily convert into ordinary shares upon acceptance
of the first purchase order under the purchase agreement, although
LGES may elect to convert some or all of the notes prior to such
time. No interest would be payable on the notes in these
circumstances.
- The convertible
notes may be redeemed or converted (at the election of LGES) on the
maturity date, in which case interest is payable in cash (in
respect of a redemption) or “in-kind” (in the case of conversion).
The convertible notes will be issued with a conversion price of
AUD$1.60 per ordinary share.
- NOVONIX plans to utilize the proceeds
for continued development of anode materials, operational needs and
general corporate purposes.
This announcement has been authorized for release
by NOVONIX Chairman, Admiral Robert J. Natter, USN Ret.
About NOVONIX
NOVONIX is a leading battery technology company
revolutionizing the global lithium-ion battery industry with
innovative, sustainable technologies, high-performance materials,
and more efficient production methods. The Company manufactures
industry-leading battery cell testing equipment in Canada and is
growing its high-performance synthetic graphite anode material
manufacturing operations in the United States. Through advanced
R&D capabilities, proprietary technology, and strategic
partnerships, NOVONIX has gained a prominent position in the
electric vehicle and energy storage systems battery industry and is
powering a cleaner energy future. To learn more, visit us at
www.novonixgroup.com or on LinkedIn, and Twitter.
About LG Energy Solution
LG Energy Solution (KRX: 373220), a split-off from
LG Chem, is a leading global manufacturer of lithium-ion batteries
for electric vehicles, mobility, IT, and energy storage systems.
With 30 years of experience in revolutionary battery technology and
extensive research and development (R&D), the company is the
top battery-related patent holder in the world with over 25,000
patents. Its robust global network, which spans North
America, Europe, Asia, and Australia, includes
battery manufacturing facilities established through joint ventures
with major automakers such as General Motors, Stellantis N.V.,
Hyundai Motor Group, and Honda Motor Co., Ltd. At the forefront of
green business and sustainability, LG Energy Solution aims to
achieve carbon neutral operations by 2050, while embodying the
value of shared growth and promoting diverse and inclusive
corporate culture. To learn more about LG Energy Solution’s ideas
and innovations, visit https://news.lgensol.com.
Media Contacts:
NOVONIX LimitedScott
Espenshade, ir@novonixgroup.com (investors) Lori Mcleod,
media@novonixgroup.com (media)
LG Energy Solution
Sally Seung Yeon LeeMedia
Relations Team lsyciel@lgensol.com / +82 2 3773 6571
Sophia Sojeong KimMedia Relations
Team sophiakim32@lgensol.com / +82 2 3773 4496
Forward-Looking Statements
This communication contains forward-looking
statements about the Company and the industry in which we operate.
Forward-looking statements can generally be identified by use of
words such as “anticipate,” “believe,” “contemplate,” “continue,”
“could,” “estimate,” “expect,” “intend,” “may,” “plan,”
“potential,” “predict,” “project,” “should,” “target,” “will,” or
“would,” or other similar expressions. Examples of forward-looking
statements in this communication include, among others, statements
we make regarding our joint research and development agreement with
LG Energy Solution, including the qualifications of the anode
material, future supply commitments or the development of NOVONIX’s
proposed new facility for the production of anode materials for EV
batteries and the anticipated performance and benefits. We have
based such statements on our current expectations and projections
about future events and trends that we believe may affect our
financial condition, results of operations, business strategy and
financial needs. Such forward-looking statements involve and are
subject to known and unknown risks, uncertainties and other factors
which may cause our actual results, performance or achievements to
be materially different from any future results, performance or
achievements expressed or implied by the forward-looking
information. Such factors include, among others, our ability to
achieve the objectives and financial benefits of the joint research
and development agreement and potential purchase agreement, the
accuracy of our estimates regarding expenses, future revenue,
capital requirements and needs for additional financing, and
regulatory developments in the United States, Australia and other
jurisdictions. Detailed information regarding these and other
factors that could affect our business and results is included in
our filings, including the Company's most recent transition and
annual reports on Form 20-F, particularly the “Operating and
Financial Review and Prospects” and “Risk Factors” sections of
those reports. Copies of these filings may be obtained by visiting
our Investor Relations website at www.novonixgroup.com or the SEC's
website at www.sec.gov.
Forward-looking statements are not guarantees of
future performance or outcomes, and actual performance and outcomes
may differ materially from those made in or suggested by the
forward-looking statements contained in this communication.
Accordingly, you should not place undue reliance on forward-looking
statements. Any forward-looking statement in this communication is
based only on information currently available to us and speaks only
as of the date on which it is made. We undertake no obligation to
publicly update any forward-looking statement, whether written or
oral, that may be made from time to time, whether as a result of
new information, future developments or otherwise.
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