Tesla has entered into a Binding Offtake Agreement with Australia-based Magnis Energy Technologies, “a vertically integrated lithium-ion battery technology and materials company,” for anode active materials (AAM).
Magnis is developing a graphite mine in Tanzania where it plans to extract “ultra-high-purity natural flake graphite.” Tesla plans to purchase at least 17,500 tons per year (tpa) starting from February 2025, and has an option to buy up to 35,000 tpa for a 3-year term at a fixed price.
But here’s the interesting bit: the deal specifies that Magnis will build a US facility to process the graphite into AAM for use in EV batteries.
Establishing domestic sources of raw materials—and especially, onshoring the processing of the specialized materials required for batteries, which currently takes place mostly in China—is a top priority for automakers these days, and Tesla is no exception. Indeed, the company has always been proactive about building the supply chain it will need to scale up its vehicle production.
“The agreement is conditional on Magnis securing a final location for its commercial AAM facility by 30 June 2023, producing AAM from a pilot plant by 31 March 2024, commencing production from the commercial AAM facility by 1 February 2025, and customer qualification,” says Magnis.
Magnis is a part owner of iM3NY, which recently began producing batteries at a new plant in Endicott, New York. Magnis is also an investor and partner with C4V, a New York-based battery tech firm.