Name of the Project
Molo graphite mine expansion.

Location
Province of Toliara, southern Madagascar.

Project Owner/s
Strategic materials development company NextSource Materials.

Project Description
A feasibility study has confirmed the highly attractive economics for a large-scale expansion of the Molo mine and processing facility.

Phase 1 of the Molo mine consists of the construction of a greenfield openpit mine, a 240 000 t/y processing plant producing 17 000 t/y of graphite concentrate and all supporting infrastructure, including water, fuel, power, co-disposal tailings, buildings and permanent accommodation. 

The feasibility proposes the addition of a standalone processing plant capable of processing 2.64-million tonnes of ore, increasing production to 150 000 t/y of graphite concentrate over a 25 year life-of-mine and all supporting infrastructure, including water, fuel, power, a co-disposal tailings facility, buildings and permanent accommodation.

Phase 1 is powered by a solar-hybrid power plant that is expected to reduce CO2 emissions by more than 11 300 t/y.

Potential Job Creation
Not stated.

Net Present Value/Internal Rate of Return
The project has a pretax net present value, at an 8% discount rate, of $424.1-million and an internal rate of 31.1%.

Capital Expenditure
$161.7-million.

Planned Start/End Date
Construction of the mine was completed in early 2023, with commissioning starting in March. First graphite concentrate was produced in June 2023.

Latest Developments
NextSource remains committed to ramping up and expanding operations at its Molo graphite mine despite ongoing market challenges.

The company is balancing production with demand to ensure economic viability; however, NextSource is yet to declare commercial production.

Since first production in June 2023, the company has implemented several process enhancements, including replacing final product dryer equipment and finished-product screens following a third-party assessment.

In October 2024, NextSource successfully exported its first full container loads of high-quality, on-specification coarse flake graphite concentrate. These shipments, delivered under existing sales agreements, cater to demand from sectors, including refractory materials, graphite foils for consumer electronics and fire-retardant applications. 

Verification is under way to ensure compliance with commercial sales specifications.

Despite delays in reaching commercial production, plant optimisation remains a key priority to sustain output while controlling costs.

The company has acknowledged that natural graphite prices declined in 2024, citing weaker-than-expected electric vehicle demand and increased supply from China. However, the company remains bullish on long-term fundamentals.

Industry forecasts project significant demand growth between 2025 and 2030, driven by the accelerating adoption of lithium-ion batteries. Citing Benchmark Minerals Intelligence, NextSource has warned that 97 new graphite mines will be required by 2035, with potential supply shortages lasting up to 20 years unless supply sources diversify beyond China.

NextSource has set key milestones for the 2025/26 financial year, including ramping up Molo to its targeted production capacity of 15 000 t/y to 17 000 t/y of SuperFlake graphite concentrate.

The company also aims to formally declare commercial production while continuing to build its customer base and sales channels. Once Molo reaches commercial production, NextSource will provide formal guidance on output, revenue and operating costs.

Key Contracts, Suppliers and Consultants
Caracal Creek International Consulting (responsible for geology and resource estimate); ECMA Consulting (responsible for reserve statement and mining); ECOE (responsible for tailings); Erudite (responsible for the overall project); Practara (capital expenditure, operating expenditure and financial evaluation); and SGS Lakefield (mineral process in metallurgical testing).

Contact Details for Project Information
NextSource Materials, tel +1 416364 4911 or email info@nextsourcematerials.com.