Evolution Energy Solutions LLC is a US-subsidiary of Evolution Energy Minerals, incorporated to progress EV1’s downstream plans for the production of high-value coated spherical graphite products.

During 2022, Evolution completed a commercial verification program confirming the suitability of Chilalo fine flake graphite for the production of coated spherical graphite (“CSPG”) for use in lithium-ion batteries.

The company conducted a commercial verification program that determined its Chilalo fine flake graphite is suitable for the production of ultra-high purity graphite suitable for the nuclear industry as well as coated spherical graphite that meets electric vehicle (EV) battery manufacturer specifications.

SEM analysis of Chilalo’s thermally purified uncoated spherical graphite (left) and coated spherical graphite (right)

Evolution has been working on potential sites for the development of a US downstream operation since 2022, with key criteria including availability of low-cost electricity, access to skilled labour, distance from suitable ports and State and Federal fiscal incentives on offer.

Evolution has reached an agreement with BTR that will position the Company as a vertically integrated producer of lithium-ion battery anode materials using fine flake graphite from the Chilalo Graphite Project.

BTR is the global leader in the manufacture of battery anode materials accounting for approximately 26% of global market share. BTR is also the world’s third largest producer of cathode materials. In addition, BTR has substantial capability in research and development which ensures it remains at the forefront of lithium-ion battery technology advancements.

BTR and Evolution have also signed an MOU outlining the indicative terms for the parties forming a downstream processing collaboration for the manufacture of battery anode materials, with an initial focus on the US.

BTR will provide its leading natural graphite anode processing technology to the joint Evolution/BTR downstream collaboration. BTR’s existing relationships with leading global battery manufacturers will see it manage product development, qualification and marketing initiatives for downstream products and receive a product royalty for this service.

Evolution will ultimately supply fine flake graphite from Chilalo to the downstream joint venture and, through its US subsidiary (Evolution Energy Solutions LLC), accelerate site selection and engagement with relevant authorities.

Why the US for
downstream anode development?

The US Department of Energy (“DoE”) estimates that by 2025, the US will reach 600GWh of battery capacity, which will require 700,000 tonnes per year of battery anode materials.

This requirement, together with the various policy initiatives to incentivize the supply of critical minerals into the US market and the manufacture of battery anode materials, makes the US the ideal location for the establishment of Evolution’s downstream processing facility.

The US has designated graphite as a strategic critical mineral. The strategic importance of graphite and the US Government’s commitment to securing the supply of strategic critical minerals (such as graphite), and developing domestic battery anode materials manufacturing capacity, presents Evolution with an exceptional opportunity for the Chilalo Graphite Project in Tanzania to provide feedstock for a downstream processing operation to be established by Evolution in the USA.

US strengthening
ties with Tanzania

In March 2023, US Vice President Kamala Harris visited Tanzania as part of a strengthening of economic ties between the USA and Tanzania, and with Africa more broadly.

With US backing, Tanzania is building a processing facility at the Kabanga nickel project in north-western Tanzania, that is targeted to deliver battery-grade nickel to the United States and global markets by 2026.

With the US Government prioritizing security of ex-China critical minerals supply, this strengthening of economic ties between the US and Tanzania further validates Evolution’s commitment to a vertically integrated business with its Chilalo graphite providing feed for a US based downstream processing facility.

US Policy
Developments

In a bid to secure supply of critical minerals for the clean energy transition and to establish large-scale onshore critical minerals processing capacity, the US has introduced significant policy initiatives, including:

• Inflation Reduction Act – passed into law in August 2022, the IRA proposes that the US Government will invest approximately $300 billion in deficit reduction and $369 billion in energy security and climate change programs over the next ten years. The US Government has mandated that by 2027, 80% of critical minerals in US-made EV batteries must come from US miners or recycling plants, or mines in countries with free trade arrangements with the US. Under the IRA, foreign entities of concern are excluded from assistance with the focus on Allied Nations that includes the European Union, United Kingdom, Australia, Japan, South Korea and other aligned countries.
• Bipartisan Infrastructure Law – Battery Materials Processing and Battery Manufacturing & Recycling (“BIL”) – introduced by the US Government in 2022, the BIL provides US$7 billion of funding opportunities in the form of grants. On 19 October 2022, the DoE announced the first rounds of grants under the BIL, which totaled US$2.8 billion.
• Mineral Security Partnership (“MSP”) – under the MSP, the member countries – Australia, Canada, Finland, France, Germany, Japan, the Republic of Korea, Sweden, the United Kingdom, the United States and the European Commission – have agreed to collaborate to mobilize investment to secure supply of critical minerals that adheres to leading environmental, social and governance standards.

Evolution is staying abreast of the latest developments in the US Government’s efforts to establish secure domestic battery material supply chains.

The Company recognizes this is a key priority for the government and is actively monitoring opportunities for US Government engagement.

By working closely with the US Government and other stakeholders, Evolution aims to contribute to a more sustainable and secure future for the energy storage sector.

Leadership
Team