NOVONIX and LGES Unite for Artificial Graphite Anode and US$30 MN Investment Agreement

BRISBANE [Australia]: An agreement for cooperation research and development of synthetic Graphite anode material for lithium-ion batteries was inked today, according to NOVONIX Limited, a leading battery materials and technology business, and LG Energy Solution, a major global battery producer. In a separate deal, NOVONIX also agreed to issue LGES unsecured convertible notes with a total principal amount of $30 million.

LGES and NOVONIX will enter into a separate purchase agreement following the successful completion of some development work under the JDA, and as a result, LGES will have the option to purchase up to 50,000 tonnes of artificial Graphite anode material over a ten-year period following the start of mass production.

LGES, a top global battery manufacturer with two independent and five joint venture facilities already up and running or under construction in the United States, intends to take full advantage of the Inflation Reduction Act (IRA) by increasing local battery production and creating a local supply network for battery parts. LGES also wants to hasten the localization of the production and assembly of battery components, such as electrodes, cells, and modules, to maintain its market dominance in North America.

LGES supports NOVONIX's goal of creating a reliable, sustainable supply chain option for high-performance artificial Graphite in North America by broadening its supplier base as it increases the manufacturing of battery cells. NOVONIX, which already has offices in Chattanooga, Tennessee, will provide IRA-compliant documents for its American clients. The Department of Energy chose the company for a US$150 million grant to encourage its growth, demonstrating the government's commitment to the battery supply chain industry.

LGES and NOVONIX have been informally talking about financing and developing artificial Graphite anode material that complies with LGES's requirements since December 2022. The content will be created at NOVONIX's current facilities in Tennessee. The proposed greenfield US factory for NOVONIX is then anticipated to begin mass production in 2026.

The initial manufacturing capacity of active anode material for NOVONIX's greenfield project is 30,000 tonnes annually. To help with the financing of the facility, NOVONIX has applied for a loan with the U.S. Department of Energy's Loan Programme Office under the Advanced Technology Vehicles Manufacturing Loan Programme. For the purchase of anode materials from its greenfield factory, NOVONIX continues to explore and engage negotiations with additional original equipment manufacturers and cell makers.

Partnership with NOVONIX once again demonstrates LG Energy Solution's determination to establish a strong battery supply chain in the U.S., complementing local manufacturing network to meet customers' needs for lRA-compliant batteries, Will continue to be dedicated to enhancing product competitiveness and operational excellence, producing the highest quality products both in scale and quickly, as collaborate with NOVONIX to develop a new source of artificial Graphite anode material.

Excited to formalise work with LG Energy Solution and establish the pathway for NOVONIX to become a supplier for LGES of artificial Graphite anode material in the United States, stated Chris Burns, CEO of NOVONIX. By establishing a supply chain for high-performance synthetic Graphite for the North American battery industry, this agreement confirms position as industry leaders.