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Novonix gets to the Kore of US battery business with strategic deal

Business

Novonix will take a $US25 million ($A35 million) strategic stake in US battery cell manufacturer Kore Power.

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The deal will also mean Novonix would become an exclusive supplier to Kore of synthetic graphite which it produces from its American plant.

The deal is only within a letter of intent and would need approval of both boards and the execution of definitive documents.

The structure of the deal is for Novonix to take a 5 per cent stake in Kore. That equates to 3.3 million shares at $US7.50 a share. It would be paid in cash and Novonix shares.

It follows a technology sharing deal last week with US energy company Phillips66, which is also its biggest shareholder.

Novonix said the deal was aimed at strengthening the North American supply chain for battery manufacturing, which is currently dominated by China. The two companies had previously worked together in testing and validating Kore’s battery cell technology which is aimed at grid-scale batteries as well as electric vehicle batteries.

Alongside the partnership, the two companies have also agreed to enter into a supply deal. That could be significant for Novonix because Kore has plans to build a 12 gigawatt-hour faciolity in Buckeye, Arizona, to supply the local market.

It has forecast a need for 12,000 tonnes a year of graphite anode material. Novonix has plans to produce 10,000 tonnes of synthetic graphite from 2023 at its anode materials business in Chattanooga, Tennessee. That would increase to 40,000 tonnes by 2025 and 150,000 tonnes by 2030.

Kore Power chief executive Lindsay Gorrill said the “booming US market” was leading the global transition to grid-scale battery systems and the support of Novonix would

Novonix chief executive Dr Chris Burns said Kore’s cell performance was comparable to tier one cell providers.

“We are reducing the reliance on foreign materials and furthering the US’s position as a global energy storage provider by providing high-capacity long-life synthetic graphite anode material to a leading domestic developer,” Burns said.

The deal could not help the Novonix share price which sank 8 per cent as the broader market was sold off.

 

 

 

 

 

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