The Novonix Ltd (ASX: NVX) share price is having a day to remember on Wednesday.
In morning trade, the battery materials technology company's shares are up 23% to 83 cents.
Why is the Novonix share price surging?
Investors have been scrambling to buy the company's shares after it released a very positive announcement.
According to the release, the Novonix Anode Materials division has finalised its US$100 million grant award from the U.S. Department of Energy (DOE). These funds will be used to expand domestic production of high-performance, synthetic graphite anode materials at its Riverside facility in Chattanooga, Tennessee.
While this is lower than the US$150 million it was originally seeking, management explained that this was because it successfully reallocated funding more immediately to its Riverside facility and accordingly resized the award to US$100 million. Under the terms of the grant, government funds must be matched by the recipient.
The DOE grant funding will support the installation and commissioning of equipment to produce the targeted 20,000 tonnes per annum (tpa) of capacity from Riverside.
Novonix's CEO, Dr. Chris Burns, was delighted with the news. He said:
We are excited to complete the award negotiation with the DOE and expand the capacity of our Riverside facility. The ability to deploy $100 million towards Riverside's recently increased production targets will have an immediate beneficial impact on the Company's plans and the battery materials supply chain here in North America.
Recent Chinese export controls on graphite reiterate the importance of building domestic supply in the U.S. We remain committed to continued expansion and building additional production facilities with our focus currently on reaching mass production at Riverside to demonstrate our ability to compete, both technically and commercially, on a global scale.
Novonix also revealed that it continues to advance plans for a new production facility with an initial production target of at least 30,000 tpa. It expects the engineering and design of this facility to leverage the updated engineering specific to Riverside and be completed in the first quarter of next year.