Westwater Resources Announces Off-Take Sales Agreement with Stellantis for Sale of Graphite from its Kellyton Plant
Westwater Resources (NYSE American: WWR) has announced a binding off-take agreement with Fiat Chrysler Automobiles (FCA), part of Stellantis, to supply natural graphite anode material from its Kellyton Graphite Plant in Alabama. This agreement, combined with a previous deal with SK ON, secures off-take for 100% of Kellyton Phase 1 capacity. FCA will purchase a percentage of their forecasted volume annually. Westwater has invested over $120 million in the Kellyton plant and is now seeking debt financing to complete construction. The company views this as a important step in establishing a U.S.-based supply chain for natural graphite anode material in the electric vehicle industry.
- Secured binding off-take agreement with major EV manufacturer Stellantis (FCA)
- Achieved 100% off-take for Kellyton Phase 1 capacity
- Positioned to secure debt financing for plant completion
- Established as a U.S.-based supplier for critical EV battery material
- Reliance on debt financing to complete plant construction
- Potential risks associated with meeting production capacity for off-take agreements
Insights
Westwater Resources' new off-take agreement with Stellantis, parent company of Fiat Chrysler Automobiles, represents a significant milestone for the company as it secures 100% of its Kellyton Phase 1 capacity. This agreement not only ensures a steady revenue stream but also enhances the company's credibility and attractiveness to potential financiers. With over
From a financial perspective, this agreement should bolster short-term revenue forecasts and improve long-term stability. Investors can expect enhanced financial performance metrics in subsequent quarters as deliveries commence. However, it is essential for Westwater to manage operational risks associated with scaling up production to meet the agreements with both Stellantis and SK ON.
Given the nascent stage of commercial production, volatility in earnings and potential liquidity risks remain concerns. Investors should watch for further announcements regarding financing and operational execution.
This off-take agreement aligns with the growing demand for EV battery materials. The commitment from Stellantis, a significant player in the EV market, underscores the increasing need for secure, domestic supply chains amid ongoing global disruptions. For investors, this agreement signifies strategic positioning within a rapidly expanding market.
The deal's importance is further emphasized by the U.S. focus to localize critical materials supply chains, reducing reliance on overseas sources. This trend can drive policy support and potential subsidies, benefiting companies like Westwater.
However, market saturation and competitive pressures are important factors to monitor. While the secured capacity is positive, the company’s ability to maintain competitiveness and expand beyond Phase 1 will be vital for sustained growth.
Securing an off-take agreement for natural graphite anode material places Westwater at the forefront of a critical supply chain for EV batteries. This partnership with Stellantis highlights the growing importance of graphite in battery technology due to its superior performance characteristics compared to synthetic alternatives.
Given the current technological landscape, the move is strategically advantageous. Natural graphite's high energy density and efficiency make it an ideal choice for next-generation EV batteries. By securing long-term supply agreements, Westwater ensures that it remains a key player in the evolving battery technology sector.
Nevertheless, technological advancements and potential disruptions in materials science could pose risks. Continuous innovation and maintaining high standards in product quality will be essential for sustaining long-term partnerships.
- Westwater contracts with Fiat Chrysler Automobiles (“FCA”), a leading manufacturer of electric vehicles and part of Stellantis, to supply natural graphite anode material.
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With this binding Off-Take Agreement and the previously announced agreement with SK ON, Westwater has now secured off-take agreements for
100% of its Kellyton Phase 1 capacity. -
With over
$120 million Kellyton plant, and with these two off-take agreements in place, Westwater is proceeding to secure debt financing to complete construction.
Pursuant to the terms of the Off-Take Agreement, Westwater will supply natural graphite anode material from its Kellyton Graphite Plant located near
“The contract with FCA is an important achievement for Westwater and a key step in the process of securing the remainder of construction financing for Kellyton Phase I construction,” said Frank Bakker, President and CEO of Westwater Resources.
“We are honored to partner with one of the world’s leading manufacturers of EVs and to assist FCA in securing a
Jon Jacobs, Westwater’s Chief Commercial Officer, added, “With this deal, Westwater has now secured off-take agreements for
About Westwater Resources, Inc.
Westwater Resources is an energy technology company that is focused on developing battery-grade natural graphite. Westwater Resources’ primary project is the Kellyton Graphite Processing Plant that is under construction in east-central
About Stellantis
Stellantis N.V. is a multinational automotive manufacturing corporation formed from the merger in 2021 of the Italian–American Fiat Chrysler Automobiles (FCA) and the French PSA Group. The company is headquartered in
As of 2023, Stellantis was the world's fourth-largest automaker by sales, behind Toyota, Volkswagen Group, and Hyundai Motor Group. In 2023, the company was ranked 61st in the Forbes Global 2000. The company's stock is listed on the Borsa Italiana, Euronext Paris and the New York Stock Exchange.
Stellantis designs, manufactures, and sells automobiles bearing its 14 brands: Abarth, Alfa Romeo, Chrysler, Citroën, Dodge, DS, Fiat, Jeep, Lancia, Maserati, Opel, Peugeot, Ram, and Vauxhall. At the time of the merger, Stellantis had approximately 300,000 employees, a sales presence in more than 130 countries, and manufacturing facilities in 30 countries.
Cautionary Statement Regarding Forward-Looking Statements
This news release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are subject to risks, uncertainties and assumptions and are identified by words such as “will,” “secure or securing,” and other similar words. Forward-looking statements in this release include, among other things, statements concerning Westwater’s future sales of graphite products to FCA, including the amounts, timing, and types of products included within those sales, Westwater’s expectations with respect to this Off-Take Agreement, Westwater’s process of securing the remainder of construction financing for Kellyton Phase I, and Westwater’s status as a leader in the supply of US-produced natural graphite. Westwater cautions that there are certain factors that could cause actual results to differ materially from the forward-looking information that has been provided. The reader is cautioned not to put undue reliance on this forward-looking information, which is not a guarantee of future performance and is subject to a number of uncertainties and other factors, many of which are outside the control of Westwater; accordingly, there can be no assurance that such suggested results will be realized. Additional risks facing Westwater’s future prospects are discussed in the Westwater Resources, Inc. Annual Report on Form 10-K for the year ended December 31, 2023, and subsequent securities filings.
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Westwater Resources, Inc.
Email: Info@WestwaterResources.net
Investor Relations
Email: Investorrelations@westwaterresources.net
Source: Westwater Resources, Inc.
FAQ
What is the significance of Westwater Resources' off-take agreement with Stellantis?
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