ASX-listed graphite producer Evolution Energy Minerals has signed investment and offtake deals and a memorandum of understanding (MoU) for collaboration with Chinese battery anode producer BTR New Material Group (BTR).

Under the strategic alliance, BTR agreed to pick a 9.9% stake in Evolution through the purchase of 22.3 million shares at $0.22 apiece, totalling A$4.9m ($3.14m).

In return, Evolution will supply 100% of its fine flake graphite from the Chilalo project, a development-ready graphite mine in Tanzania, to BTR for three years, with an option to extend it for another three years.

The companies estimate that the mine will produce nearly 20,000 tonnes per annum of graphite.

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By GlobalData

This MoU is expected to bring several benefits to Evolution, including an opportunity to partner with BTR’s natural graphite anode processing technology.

The companies plan to initially focus on the economic assessment of downstream processing in North America while also considering locations outside of China.

The duo will work on a binding downstream agreement by next March.

Evolution managing director Phil Hoskins said: “These transactions provide a clear pathway to funding and accelerate Evolution’s transformation from graphite mine developer to a vertically integrated graphite company.

“The offtake agreement and BTR’s financial backing are expected to materially support the ongoing project finance process for our Chilalo project. Leveraging BTR’s world-leading commercially proven technology, innovation and Tier 1 customer base is expected to de-risk the proposed Evolution/BTR downstream collaboration and fast-track Evolution’s exposure to the rapidly growing battery anode market. We look forward to a long-term strategic relationship with BTR.”