A battery development consortium part-owned by graphite company Magnis Energy Technologies (ASX: MNS) has signed a US$52 million (A$73 million) funding deal for the US-based production of lithium-ion batteries.
Imperium3 New York signed the term sheet via a pre-issued European bond used to fund renewable energy projects, with payments to consist of two stages.
The first payment of US$30 million (A$42 million) will be on completion of final documentation and checks by both parties, with the remaining amount to be issued 12 months after the first payment with no milestone attached.
The deal will allow Imperium3 to invest in the development of lithium-ion batteries at the world-class Huron Campus Gigafactory facility in New York, previously used by IBM to manufacture high-tech equipment.
Spread across 60 hectares, the high-tech facility has been considered ideal for the manufacture of battery materials and batteries/cells as it has existing temperature and humidity-controlled buildings and warehouse facilities ready to integrate new technologies.
The site has a transmission level substation with a 50 megawatt capacity and the campus contains technology, specialised equipment, an experienced team, and nearly 100 years in logistics business expertise – all key contributors to Magnis’ selection of the site in 2017.
The plant is currently being upgraded to suit Imperium3’s requirements and will become the first of three global locations from which Imperium3 will carry out volume manufacturing operations.
Magnis chairman Frank Poullas said the current schedule aims to have battery production starting within 12 months of funding closure, with offtake contracts in place for the majority of the first three years of planned production.
“Production is our main goal,” he said.
“Imperium3 has assessed a few proposals recently regarding the funding of our New York project and … this proposal allows [us] to move towards developing the project into production and importantly without any dilution in ownership.”
Magnis has a 47% stake in Imperium3 New York.
At mid-afternoon, shares in Magnis were 10% higher at $0.275.