Northern Graphite Corporation and Saudi diversified industrial group Obeikan Investment Group have signed a term sheet to jointly develop a large scale battery anode material facility through a dedicated joint venture.
The project, estimated at approximately $200 million, is designed with an initial production capacity of 25,000 tonnes per year, with provisions to scale as demand grows. Ownership will sit at 51 percent for Obeikan and 49 percent for Northern Graphite, placing operational control with the Saudi partner while anchoring technical expertise with the Canadian producer.
The proposed capacity is modest relative to global anode demand but strategically significant in origin. Battery anode materials remain heavily concentrated in East Asia, particularly China, not only in mining but in purification and spherical graphite processing. Efforts by the United States, Europe, and allied markets to diversify supply have been constrained by permitting timelines, capital intensity, and limited processing expertise outside Asia. Saudi Arabia’s entry leverages capital availability, industrial infrastructure, and geographic proximity to European and emerging Middle Eastern battery markets.
Construction is expected to begin in 2026, with first phase production forecast for 2028. That timeline aligns with the expected ramp of battery manufacturing capacity in Europe and the Middle East but also reflects a risk window. Multiple graphite processing projects globally have announced similar schedules, raising questions about mid term oversupply if demand growth softens or technology shifts toward lower graphite intensity chemistries. The Yanbu facility’s scalability is positioned as a hedge, allowing phased expansion rather than immediate full buildout.
Financing structure further highlights Saudi Arabia’s role as a capital anchor in critical materials. The facility will be funded at the joint venture level, with Obeikan leading the organization of local debt financing, while remaining capital is expected to come from equity contributions proportional to ownership and support from commercial banks. This model reduces Northern Graphite’s balance sheet exposure while giving Saudi lenders and institutions a direct stake in global battery materials infrastructure.
For Northern Graphite, the project supports a broader shift from upstream mining toward vertical integration. The company has framed the joint venture as a step toward becoming a fully integrated anode material producer, linking processing capacity in Saudi Arabia with upstream assets such as the Okanjande mine in Namibia. That mine to market strategy reflects a wider industry trend, as battery manufacturers increasingly demand traceability and security of supply rather than spot market graphite.
Saudi Arabia’s strategic rationale is equally clear. The partnership aligns with national ambitions to develop advanced materials and clean energy supply chains as part of industrial diversification efforts. By situating the facility in Yanbu Industrial City, the project taps into existing port infrastructure, industrial utilities, and export logistics, positioning the Kingdom as a processing hub rather than solely an energy exporter.
