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Sustainable Investing Podcast Recap: CFO Discusses First US Integrated Graphite Project and Achieving 100% Contracted Offtake

CFO Steve Cates recently joined us on the WTR Sustainable Investing podcast. WWR is developing and now constructing the first fully integrated graphite mining and processing operation in the contiguous US. Those interested can listen to the episode on Apple Podcasts, Spotify, or on our website. Links available in our full report. When asked about the value proposition of the company, Cates said WWR is the only publicly traded, US-based graphite anode company with 100% domestic sourcing and processing. The processing facility in Alabama is very close to battery manufacturing plants that are being built to supply EV manufacturing in the US. This is a major positive for customers looking for security of supply. Since all materials will be sourced in the US, these will qualify for domestic incentives and tax credits. Furthermore, WWR’s process provides a low carbon footprint with environmentally friendly purification technology. Cates said that after talking with customers, it became clear to management that the original designed graphite processing capacity was not going to be large enough. As a result, at the end of 2023, WWR announced plans to increase the capacity of the Kellyton project from 7,500 metric tons per annum to 12,500 metric tons per annum. Even with expansion, the company remained within the planned $271 million budget including a contingency. As of March, the capital spending on the project so far has been $120 million. Start-up is expected in 2026. WWR has announced offtake agreements this year with SK On (February) and Fiat Chrysler (July) and, as a result, has secured 100% offtake of Kellyton phase one. SK On is a large Korean battery manufacturer that supplies batteries to companies like Nissan, Hyundai, and Volkswagen, while Fiat Chrysler is part of the Stellantis Group. This is a significant milestone. According to Cates, the process of finalizing offtake agreements is long and requires a substantial amount of technical diligence from the customer. Also, having the certainty of fully committed capacity is very beneficial to lenders. With these offtake agreements in place, Cates said this positions WWR for signing an offtake agreement between the Kellyton processing plant and the company’s Coosa graphite mine. WWR owns the mineral rights to 42,000 acres at the Coosa deposit, which is located just 30 miles from Kellyton. An initial technical assessment of Coosa completed on behalf of WWR arrived at a pre-tax NPV of $229 million and that includes exploration on only 10% of the acreage so far. Cates said the timing of permitting can be uncertain, but that management expects the mine to be operational and integrated into downstream processing by the end of 2028.