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Novonix surges on Phillips investment

NOVONIX shares surged on Tuesday, after the developer and supplier of in-demand materials for lithium-ion batteries announced that U.S. giant, Phillips 66 said it would acquire a 16% stake in the company.

The investment will expand Phillips 66’s presence in the battery supply chain and advance NOVONIX’s production of synthetic graphite for high-performance lithium-ion batteries

Phillips 66 is a $32 billion manufacturer of specialty coke, a key precursor in the production of batteries that power electric vehicles, personal electronics, medical devices, and energy storage units. NOVONIX, a leading producer of synthetic graphite, processes specialty coke to make high-performance anode material for these batteries. The investment supports the development of a fully domestic supply chain for sales into the U.S. electric vehicle and energy storage system markets.

NOVONIX’s anode materials business is based in Chattanooga, Tennessee, where it is increasing its capacity to produce 10,000 metric tons per year of synthetic graphite by 2023. The investment by Phillips 66 will support a capacity expansion of an additional 30,000 mt/year, which is expected to be completed by 2025.

Under the terms of the agreement, Phillips 66 will subscribe for 78 million shares for US$150 million. Additionally, Phillips 66 will nominate one director to NOVONIX’s Board of Directors. The transaction is subject to approval by NOVONIX shareholders, as well as other closing conditions.

Greg Garland, Chairman and CEO of Phillips 66 said, “This strategic investment enables Phillips 66 to directly support the development of the U.S. battery supply chain. It advances our commitment to pursue lower-carbon solutions while leveraging our leadership position and expertise in the specialty coke market and supporting NOVONIX’s emerging position in U.S.-based anode production.”

NOVONIX CEO and co-founder Chris Burns, Ph.D. noted “Phillips 66’s investment will provide us with the capital needed to support growth and ongoing R&D as we continue to scale our synthetic graphite production and develop new technologies for higher-performance energy storage applications."

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