The Novonix Ltd (ASX: NVX) share price is on the move on Wednesday morning.
At the time of writing, the battery materials company's shares are up 12% to $1.09.
Why is the Novonix share price rising?
Investors have been bidding the Novonix share price higher this morning after the company announced an agreement with global battery manufacturer LG Energy Solution (LGES).
According to the release, the two parties have signed an agreement for the joint research and development of artificial graphite anode material for lithium-ion batteries.
The agreement will ultimately give LGES the option to purchase up to 50,000 tons of the anode material from Novonix's United States-based facility over a 10-year period from the start of mass production.
In addition, in a separate agreement, Novonix has agreed to issue an aggregate principal amount of US$30 million unsecured convertible notes to LGES. These convertible notes will be issued with a conversion price of $1.60 per share.
Novonix plans to use the proceeds for continued development of anode materials, operational needs, and general corporate purposes.
Management commentary
Novonix CEO, Chris Burns, said,
We are excited to formalize our work with LG Energy Solution and establish the path for NOVONIX to become a supplier for LGES of artificial graphite anode material in the United States. This agreement demonstrates our leading position to establish a supply chain for high-performance artificial graphite for the battery industry in North America.
Dongsoo Kim from LG Energy Solution added:
Our partnership with NOVONIX once again demonstrates LG Energy Solution's determination to establish a solid battery supply chain in the U.S., complementing our local manufacturing network to meet our customer's needs for lRA-compliant batteries. As we work with NOVONIX in developing a new source of artificial graphite anode material, we will stay committed to strengthening our product competitiveness and operation excellence, delivering the world-best quality products both in scale and with speed.
