The joint manufacturing establishment agreement is supported by local government officials and was signed by Magnis, Charge CCCV, Boston Energy and Innovation, C&D Assembly and Primet Precision Materials. The parties have been looking at potential locations for the gigafactory for the last six months, and plan to release specific details about the site in the near future, a press release states.
According to Magnis Chairman Frank Poullas, the facility will “serve a booming global market for Lithium-ion batteries.” Lithium-ion batteries consist of three main components: an anode, a cathode and an electrolyte. Graphite is used in the anode, and as mentioned, the plan is for Magnis to be responsible for supplying anode materials and technologies.
Cathode materials and technologies will be handled by Charge CCCV and Primet, and C&D Assembly will provide battery management systems and power harnessing. For its part, Boston Energy will help with project structuring, capital raising and global expansion. The target markets for the batteries will include electric vehicles and energy stationary storage systems.
The graphite will come from Magnis’ Nachu project in Southeast Tanzania, which the company released a bankable feasibility study for in March 2016. The study shows that Nachu has a post-tax NPV of US$1.69 billion and an IRR of 98 percent, both at a 10-percent discount. Its nameplate capacity stands at 240,000 tonnes of graphite concentrate per year, and reserves support an initial 15 years of operation.
Magnis has signed a number of memorandums of understanding for offtake agreements for material at Nachu, including one with South Korea’s POSCO E&C and one with Russia’s ROSATOM International Network. Tuesday’s release does not indicate how much graphite the New York gigafactory will require.
The global gigafactory landscape
The gigafactory that Magnis will be involved with is by no means the only one in the works. Tesla’s (NASDAQ:TSLA) 50GWh gigafactory in Nevada is perhaps the best known — it is already under construction, and Tesla expects it to reach full production capacity by 2018.
Large-scale battery factories are also planned in places like Hungary and Poland. And Stockholm-based startup NorthVolt has announced plans for a battery factory in Sweden by 2023. However, according to Bloomberg, electronics makers in Asia remain dominant in the battery business, with Japanese and Korean firms controlling key technology and China leading production.
The German auto industry has trailed behind the competition in terms of moving towards electric cars due to its focus on diesel as a cheap and efficient alternative. That said, on Monday, luxury car manufacturer Daimler (ETR:DAI) held a groundbreaking ceremony for a $543-million gigafactory in the country. The company plans to begin operations there in mid-2018.
Notably, Daimler’s offices were searched a day before the ceremony. The search was part of a government investigation into potential diesel emissions system fraud and false advertising claims for Mercedes cars. The probe was launched in March amid reports that some Daimler vehicles evaded emissions rules. Daimler’s Q1 report indicates that the US Department of Justice has requested that the company do an internal inquiry, and the US Environmental Protection Agency has asked the company for information as well.
Don’t forget to follow us @INN_Resource for real-time news updates!
Securities Disclosure: I, Melissa Shaw, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: Magnis Resources is a client of the Investing News Network. This article is not paid-for content.