Westwater Resources Sees Increased Demand for Kellyton Product After Implementation of Global Tariffs

Rhea-AI Summary

Westwater Resources (NYSE: WWR) reports increased demand for its natural graphite anode material following the implementation of global tariffs. The company's Kellyton Graphite Plant is positioned to benefit from new 170% import tariffs on Chinese-produced coated spherical processed graphite (CSPG) used in electric vehicle batteries.

The tariffs also extend to CSPG imports from Indonesia, South Korea, and Japan, effectively closing loopholes in the Inflation Reduction Act. According to Chief Commercial Officer Jon Jacobs, these tariffs represent a significant opportunity for Westwater, as U.S. auto companies and battery partners seek domestic CSPG suppliers to avoid tariff costs.

Positive

• 170% tariff on Chinese CSPG imports creates competitive advantage for domestic production
• Increased customer interest in new off-take contracts
• Tariffs on multiple countries (Indonesia, South Korea, Japan) strengthen market position
• Strategic positioning as U.S.-based supplier helps customers avoid tariff costs

Negative

• Tariff rates subject to future fluctuations creating uncertainty
• Company still in development phase with Kellyton plant not yet producing

Insights

Battery Materials Analyst

US tariffs on Chinese graphite create significant growth opportunity for Westwater, but success depends on execution timing and production capabilities.

The implementation of a 170% tariff on natural graphite anode material from China represents a potential strategic advantage for Westwater Resources in the domestic battery supply chain. With additional tariffs now extending to Indonesia, South Korea, and Japan, the company is positioned as one of the few domestic suppliers for the critical coated spherical processed graphite (CSPG) required for EV batteries.

This policy change essentially closes a regulatory loophole in the Inflation Reduction Act that previously allowed battery manufacturers to source graphite from overseas while still qualifying for domestic production incentives. The market implications are substantial - CSPG is a non-negotiable component in lithium-ion batteries, constituting approximately 95% of anode materials used in EVs.

However, investors should note several critical factors: First, the article refers to products "to be produced" from the Kellyton plant, indicating it isn't yet operational. Second, while customer interest has increased, the article mentions no signed contracts. Third, the tariff environment, while favorable now, could shift with policy changes.

Westwater must demonstrate it can deliver commercially viable CSPG at competitive quality standards. If they execute successfully, the company could secure a meaningful position in the domestic battery supply chain as automakers seek tariff-exempt materials. The domestic graphite processing capacity remains severely , potentially creating a significant first-mover advantage for successful early entrants like Westwater.

Trade Policy Specialist

These graphite tariffs represent a structural shift in U.S. industrial policy with significant implications for domestic producers like Westwater. The 170% tariff on Chinese CSPG essentially transforms the competitive landscape, creating a protected market for U.S. manufacturers that previously couldn't compete with lower-cost Asian imports.

What's particularly noteworthy is the comprehensive approach to closing loopholes - extending tariffs to Indonesia, South Korea, and Japan prevents simple transshipment strategies that companies might otherwise use to circumvent China-specific tariffs. This demonstrates a sophisticated understanding of supply chain dynamics by policymakers.

The CCO's statement that "import tariffs on battery natural graphite produced anywhere outside the U.S. are likely to persist" reflects the bipartisan consensus forming around supply chain security for critical minerals and battery materials. Even with potential administration changes, these protective measures for strategic materials have garnered support across the political spectrum.

For Westwater specifically, this creates a timing advantage for their Kellyton facility. U.S. automakers facing IRA compliance requirements and now these additional tariffs have strong incentives to secure domestic supply contracts quickly. The company's mention of increased interest in off-take agreements suggests they're in active negotiations that could convert to binding commitments, providing revenue visibility before production even begins.

The key question remains whether Westwater can capitalize on this favorable policy environment by bringing capacity online quickly while market conditions remain advantageous.

CENTENNIAL, Colo.--(BUSINESS WIRE)-- Westwater Resources, Inc. (NYSE American: WWR), an energy technology and battery-grade natural graphite company (“Westwater” or the “Company”), announced today that it is experiencing increased demand for its natural graphite anode material that will be produced from its Kellyton Graphite Plant after the implementation of global tariffs.

Worldwide, the vast majority of natural graphite anode material is currently imported from Chinese producers. While subject to continuing uncertainty, currently the import tariff on natural graphite anode material from China is 170%. Although some types of natural graphite used in other industries is exempt from some of the recent tariff increases, natural graphite anode material for applications in electric vehicle batteries – commonly referred to as coasted spherical processed graphite (CSPG) – is not exempt and is subject to the full tariffs.

In addition, tariffs are also now in place on CSPG shipped from other countries including Indonesia, South Korea and Japan. These broad tariffs effectively plug loopholes in the Inflation Reduction Act that the federal government has been trying to address via a series of interpretations and executive orders over the past couple of years.

Jon Jacobs, Westwater’s Chief Commercial Officer, commented, “The recent import tariffs on CSPG are a game-changer for Westwater. Although individual country tariff amounts may continue to fluctuate going forward, import tariffs on battery natural graphite produced anywhere outside the U.S. are likely to persist. Therefore, one of the best hedges for U.S. auto companies and their battery partners to avoid such tariffs completely is to buy their CSPG from U.S. producers like Westwater. In that regard, we are experiencing a notable increase in customer interest in new off-take contracts for the CSPG product to be produced from our Kellyton Graphite Plant.”

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 Alabama. In addition, Westwater Resources’ Coosa Graphite Deposit is the largest and most advanced natural flake graphite deposit in the contiguous United States — and is located across 41,965 acres (~17,000 hectares) in Coosa County, Alabama. For more information, visit westwaterresources.net.

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 and phrases such as “increased,” “will be produced,” “vast majority,” “uncertainty,” “broad,” “effectively,” “trying to address,” “fluctuate,” “likely to persist,” “experiencing,” and other similar words or phrases. Forward looking statements include, among other things, statements concerning: the importance of critical minerals including battery-grade graphite; establishing a graphite industry in the U.S.; tariffs associated with the importation of natural graphite into the U.S. including the percentage of those tariffs and the countries for which tariffs will apply; the Company’s business plans for its Kellyton Graphite Processing Plant; and efforts to manage existing off-take agreements or to put new supply agreements into place for the products from that Plant. The Company cautions that there are 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 the Company; accordingly, there can be no assurance that such suggested results will be realized. Those uncertainties and other factors are discussed in Westwater’s Annual Report on Form 10-K for the year ended December 31, 2024, and subsequent securities filings, and they could cause actual results to differ materially from management expectations.

View source version on businesswire.com: https://www.businesswire.com/news/home/20250417673513/en/

Westwater Resources, Inc.

Email: Info@WestwaterResources.net

Investor Relations

Email: Investorrelations@westwaterresources.net

Source: Westwater Resources, Inc.

FAQ

What is the current import tariff rate on Chinese graphite anode material for Westwater Resources (WWR)?

The current import tariff on natural graphite anode material from China is 170%.

Which countries are affected by the new graphite tariffs besides China for WWR products?

The tariffs affect CSPG imports from Indonesia, South Korea, and Japan.

How do the new tariffs impact Westwater Resources' (WWR) Kellyton Graphite Plant?

The tariffs have led to increased customer interest in new off-take contracts for CSPG products from the Kellyton Graphite Plant.

What type of graphite products are subject to the full tariffs for WWR?

Coated spherical processed graphite (CSPG) used in electric vehicle batteries is subject to full tariffs, while some other types of natural graphite used in other industries are exempt.