“The question that’s on the table today is: Are the battery manufacturers and OEMs willing to pay a premium for IRA-compliant domestic material?” executive chairman Terence Cryan said on a panel at the Society for Mining, Metallurgy & Exploration (SME)’s ninth Current Trends in Mining Finance Conference on Wednesday May 22. “I’m happy to say the answer today is yes, and our offtake agreement with SK On proved that.”
Westwater is building its Kellyton battery-grade graphite processing plant in east-central Alabama, and it owns the Coosa and Bama Mine graphite projects, also both in Alabama.
“It might seem strange that we decided to build the processing plant before the mine, but we really did that to ensure that we could get revenue and cash flow sooner,” Cryan said.
The Centennial, Colorado-based company has an offtake agreement with South Korean EV battery manufacturer SK On for the supply of coated spherical purified graphite (CSPG) to SK On’s US plants.
“There’s approximately 17 battery Giga plants under development in the US, and all of those are designed to use graphite as the anode material, and yet here in the United States, we don’t produce any of it,” Cryan said. “We’re trying to stand up a North American battery-grade graphite business in an industry that is completely dominated by China today.”
Westwater’s practices are “fundamentally different” from the way the industry operates in China, mainly due to its environmental benefits, according to Cryan. Chinese companies use hydrofluoric acid to produce CSPG, and Westwater does not, he said.
“When you’re having conversations with battery manufacturers and OEMs, they are very interested in your environmental footprint until you get to the point where you’re trying to negotiate offtake pricing with the supply chain, and then the conversation shifts – then the conversation is really about price – because they’ve been the beneficiaries over the last 20 years of inexpensive Chinese anode material,” Cryan said.
“Battery manufacturers and OEMs are sincere about wanting to have a supply chain that is environmentally responsible,” he clarified to Fastmarkets after the panel. “We see clear evidence of that in their behavior; they want to know before they do business with us about the particulars of our environmental footprint.”
Today, all anode material for lithium-ion batteries comes from China, with graphite as the anode material representing about 50% of a lithium-ion battery by weight, he said.
“We didn’t get into this business to compete with the Chinese on price,” Cryan said. “We got into this business to create a domestic industry in a critical material that has the most significance to be in supply-demand imbalance than any of the critical materials.”
Westwater applauded the US government for recently increasing US tariffs on Chinese EVs from 25% to 100%, and implementing a 25% tariff on natural graphite imports from China beginning in 2026.
“These tariffs are just what the new and critically important US-based natural graphite industry needed to compete with the monopoly that exists in China today and only strengthen Westwater’s value proposition as we move to secure additional customers,” chief commerical officer Jon Jacobs said in a statement on May 15.
The tariffs are unlikely to have much of an impact on Chinese EV manufacturers, sources in China told Fastmarkets.
Separately, the US Treasury Department earlier this month gave automakers a two-year extension, to 2027, on restrictions to some hard-to-trace minerals from China, such as graphite contained in anodes.
Fastmarkets’ assessment for graphite flake 94% C, -100 mesh, cif Europe stood at $600-700 per tonne on Wednesday, unchanged since mid-April. Fastmarkets’ assessment for graphite flake 94% C, -100 mesh, fob China was $460-481 per tonne on Thursday May 23, down from $460-491 per tonne a month ago and $530-575 per tonne at the beginning of the year.
The spread between Chinese and European graphite prices hit a five-year high in the past couple of months amid developing market dynamics caused by rising freight rates, falling Chinese prices and geopolitical factors, sources told Fastmarkets.
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