Canada’s Northern Graphite and Obeikan to open $200mn battery plant in Saudi Arabia

Canada’s Northern Graphite Corporation and Saudi Arabia’s Al Obeikan Group for Investment (OIG) have formed a joint venture to develop and operate a large-scale Battery Anode Material (BAM) facility in Yanbu Industrial City in the Kingdom of Saudi Arabia.

The term sheet, signed January 14, outlines the development of an approximately $200 million BAM facility with an initial production capacity of 25,000 tonnes per year (TPY). This is scalable over time to meet rapidly growing global demand for graphite anode materials, for which China has a monopoly.

Yanbu is a strategically located industrial and logistics hub on the Red Sea with direct access to European, North American, and Middle Eastern markets.

The JV company will be majority-owned (51 per cent) by Obeikan, a diversified industrial group engaged in packaging, printing, building glass, real estate and the digitalisation of industrial operation processes in the Middle East and Africa, and 49 per cent by Northern.

Saudi JV advances battery materials production

Construction is expected to start later this year, with first-phase production forecast to begin in 2028. The BAM facility will be funded at the JV level, with Obeikan leading the organising of local debt funding required to finance construction, development and commissioning of the plant. The remaining funding is to be provided as equity by the JV partners in proportion to their ownership interests and jointly through commercial banks.

Abdallah Obeikan, Chief Executive Officer of Al Obeikan Group for Investment Company, commented: “Our partnership with Northern is fully aligned with the Kingdom’s ambition to lead in advanced materials and clean energy supply chains.

“This partnership will combine Northern’s expertise with the industrial knowledge of Obeikan and the strength of Saudi Arabia. Together, we intend to establish a world-class BAM production hub that serves global battery manufacturers while strengthening the resilience of international supply chains.”

Negotiations with global battery manufacturers for a long-term 25,000 tpy BAM offtake agreement are in advanced stages. The JV will also enter into a long-term offtake agreement to purchase up to 50,000 tpy of graphite concentrate from Northern’s Okanjande Project in Namibia.

In recognition of Northern’s efforts in developing, assembling and integrating the required technologies, validating the products, establishing commercial relationships and a customer qualification pipeline, the JV and Northern will conclude a long-term agreement whereby Northern will receive a royalty on net sales of Battery Anode Materials in addition to its direct ownership interest in the company.

Hugues Jacquemin, Chief Executive Officer of Northern Graphite, added: “This joint venture represents a defining step in Northern’s evolution from a mining company into a fully integrated, global battery anode material producer.

“With Obeikan, we are partnering a well-financed and experienced industrial player. This helps us gain scale, financing strength, and access to one of the world’s most strategic industrial hubs.”

Project supports global lithium-ion battery growth

It also positions Okanjande as Northern’s primary growth engine, responding directly to global efforts to reduce dependence on China for graphite supply. The Yanbu BAM plant will form part of a fully integrated, traceable, multi-jurisdiction supply chain for high-performance anode material – the largest component in lithium-ion batteries – to global battery and electric vehicle manufacturers.

According to SNE Research, lithium-ion battery cell manufacturing capacity is expected to reach 4,527 GWh by 2035 (9 per cent CAGR), with graphite retaining over 91 per cent anode share through 2040.

A Final Feasibility Study (FFS) for the BAM facility will be conducted and is intended to be completed by June 30, 2026, with debt funding to follow based on the FFS.