Exhibit 1.01
NOVONIX LIMITED
CONFLICT MINERALS REPORT
(For the reporting period ending December 31, 2024)
Introduction
This Conflict Minerals Report (the “Report”) of NOVONIX Limited (“Novonix” or the “Company”) has been prepared pursuant to Rule 13p-1 (the “Rule”) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), for the reporting period January 1, 2024 to December 31, 2024.
The Rule requires disclosure of certain information when a company manufactures or contracts to manufacture products (“Covered Products”) for which the minerals specified in the Rule are necessary to the functionality or production of those products. The specified minerals are gold, columbite-tantalite (coltan), cassiterite and wolframite, including their derivatives, which are limited to tantalum, tin and tungsten (collectively, the “Conflict Minerals”), that originated in the Democratic Republic of the Congo (“DRC”) and certain adjoining countries (collectively with the DRC, the “Covered Countries”).
Novonix has determined that, during calendar year 2024, Novonix or its consolidated subsidiaries manufactured and contracted to manufacture products as to which conflict minerals, as defined in the Rule, are necessary to the functionality or production of those products. Novonix has conducted a good faith reasonable country of origin inquiry (the “RCOI”) regarding those Conflict Minerals in its supply chain between January 1 and December 31, 2024, reasonably designed to determine whether any of the Conflict Minerals originated in the Covered Countries or were from recycled or scrap sources. Based on the RCOI, Novonix has reason to believe that some portion of the Conflict Minerals necessary to the functionality or production of its products may have originated in the Covered Countries and has reason to believe that some portion of such minerals was not derived from recycled or scrap sources.
Company and Product Overview
Novonix is an Australian-registered company headquartered in Chattanooga, Tennessee with operations in both the United States and Canada. The Company is a leading battery technology company that manufactures industry-leading battery cell testing equipment in Canada and is growing its high-performance synthetic graphite anode material manufacturing operations in the United States.
Novonix has reviewed the activities of its consolidated subsidiaries and has concluded that this Conflict Minerals Report should address the activities of its Battery Technology Solutions segment, which manufactures Ultra-High Precision Coulometry battery testing systems. Based on its review, the Company has determined that it manufactured or contracted to manufacture Covered Products.
As a “downstream” purchaser of component parts, the Company is at the end of a very long supply chain. It manufactures or contracts to manufacture Covered Products, but does not directly source Conflict Minerals from mines, smelters or refiners, nor does it conduct purchasing activities directly in the Covered Countries. As such, the Company relies on its direct suppliers to provide information on the origin of any Conflict Minerals contained in any components and materials supplied to its operating subsidiaries, including sources of Conflict Minerals that are supplied to them from lower tier suppliers.
Reasonable Country of Origin Inquiry
Novonix conducted a RCOI for its operations as of December 31, 2024. The Company supports the Responsible Minerals Initiative (“RMI”) and uses the RMI’s Conflict Minerals Reporting Template (“CMRT”) as part of its RCOI process.
As part of the foregoing, the Company’s products and suppliers were assessed to identify Conflict Minerals scope and risk. The Company identified 36 components containing Conflict Minerals in its products. After reviewing its records and sourcing information for those components, the Company identified all its direct suppliers of the components containing Conflict Minerals.
The Company identified 3 direct suppliers (“In-Scope Suppliers”) for inclusion in the 2024 RCOI. The Company contacted the In-Scope Suppliers and requested CMRTs against established criteria to determine if further follow-up was required. The Company received completed responses from all 3 of the In-Scope Suppliers surveyed. Due to the complexity of its supply chain, Novonix relies on its suppliers for the accuracy and completeness of the information provided in the CMRTs.
From the 3 responses received, the In-Scope Suppliers identified approximately 424 smelters or refiners. Of the 424 smelters or refiners, approximately 369 were identified as conformant or active smelters/refiners (as determined by the RMI and defined below).
Due Diligence
As required under the Rule, for the reporting period from January 1 to December 31, 2024, Novonix has taken or is taking the measures described herein to exercise due diligence on the source and chain of custody of Covered Minerals necessary to the functionality or production of the Covered Products. Novonix’s due diligence measures have been designed to align with the framework in the Organisation for Economic Co-operation and Development Due Diligence Guidance for Responsible Supply Chain of Minerals from Conflict-Affected and High Risk Areas: Third Edition, including the related supplements on gold, tin, tantalum and tungsten (the “OECD Guidance”), as it relates to Novonix’s position as a “downstream” purchaser.
Description of Due Diligence Measures
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Step |
Actions Taken |
Establish strong company management systems. |
As a company that is in the early stage of its business life cycle, we are still in the process of developing and implementing our supply chain strategy, organization and policies, both to facilitate the growth and maturity of our commercial business operations as well as to align with the priorities we have identified as part of our Environmental, Social and Governance (“ESG”) program, which we began developing in 2022. Our ESG program includes among its priorities social impacts in the supply chain, and our ESG Committee is comprised of internal subject matter experts from across the Company, including supply chain management. We are developing, further refining, and prioritizing the policies, processes, and systems, including data collection and risk identification and mitigation, with a view to establishing strong company management systems that facilitate appropriate oversight by senior management. While much of this effort aligns with the development of our ESG program, our supply chain initiatives depend on the growth of our business and manufacturing operations and our position in the industry, as well as the implementation of our supply chain strategy and the organization needed to execute it. As part of the continued development of our supply chain strategy and organization, we intend to adopt a supplier code of conduct that will guide our commitment to conduct business and source materials and components from responsible suppliers who meet the highest applicable legal and ethical standards. As part of this effort, we will evaluate the proper policy, supplier due diligence, internal controls, and contractual and other supplier standards that will form the basis for our management system. |
Identify and assess risk in the supply chain. |
The Company assesses risk in two phases: first, it identifies direct suppliers that may contribute necessary Conflict Minerals to its products; and second, it seeks declarations from those direct suppliers using the CMRT, and assesses risk based on answers provided by In-Scope Suppliers in the CMRT. Where applicable and appropriate, the Company uses industry validation schemes to identify smelters and refiners compliant with such schemes for use in its supply chain. The Company is working to develop standard supplier-vetting procedures. |
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Step |
Actions Taken |
Design and implement a strategy to respond to identified risks. |
The Company: •reports information gathered and the actual and potential risks identified from its Conflict Minerals due diligence to senior management; •is working to develop a risk management plan consistent with the steps described above and, as appropriate, with OECD guidelines; and •is working to develop a risk management plan consistent with the steps described above; and •is working to communicate with its direct suppliers the Company’s supply chain due diligence expectations with respect to Conflict Minerals. |
Carry out independent third-party audit of supply chain due diligence at identified points in the supply chain. |
Neither the Company, nor any of its consolidated subsidiaries, typically has a direct relationship with mines, smelters or refiners of Conflict Minerals and thus does not perform or direct audits of these entities. The Company tracks the mines, smelters and refiners that have been identified by its consolidated subsidiaries’ direct suppliers as part of the CMRT and will take appropriate action as necessary. |
Report on supply chain due diligence. |
The Company has submitted and complied with its obligations under Form SD, including, but not limited to, the filing of this Conflict Minerals Report as required. This Conflict Minerals Report is publicly available on the Company’s website at https://www.novonixgroup.com/2024-conflict-minerals-report/. |
Independent Private Sector Audit
No independent private sector audit of this Conflict Minerals Report was performed for the calendar year ended December 31, 2024.
Due Diligence Results
Based on the information provided by our suppliers and information otherwise obtained through the due diligence process, Novonix has reasonably determined that the facilities that may have been used to process Novonix’s Covered Minerals in 2024 include the smelters and refiners (“SORs”) listed in Annex I.
Based on information received through the RMI Responsible Minerals Assurance Process (“RMAP”) or equivalent independent third-party audit programs, Novonix has reason to believe the countries of origin for the Covered Minerals contained in the materials received by our Covered Minerals Suppliers may include certain Covered Countries.
As a downstream purchaser of products which contain Conflict Minerals, there are inherent limitations in the due diligence measures that we carry out and our inquiries can provide only a reasonable assurance regarding the source and chain of custody. Novonix does not have any direct relationships with the mines or smelters so rely on the information provided by its direct suppliers, who can be engaged in a complex process that changes over time. We are seeking data that covers the entire reporting year and ask our suppliers to update us if the sourcing data changes.
Risk Mitigation and Future Due Diligence Measures
In the future, the Company intends to monitor RMI and other industry and regulatory initiatives related to Conflict Minerals and, where appropriate, engage third-party experts to assist the Company with its conflict minerals due diligence procedures. The Company also intends to improve its due diligence processes including through contractual mechanisms and by increasing our supplier response rate and improving the accuracy of responses. The Company also intends to communicate and monitor compliance with the Company’s Supplier Code of Conduct and a Conflict Minerals Policy for its suppliers upon their adoption.
The Company intends to continue carefully reviewing the activities of its consolidated subsidiaries to determine whether additional reporting may be required in the future.
Cautionary Note Concerning Forward-Looking Statements
Information provided in this Conflict Minerals Report, particularly under the heading “Risk Mitigation and Future Due Diligence Measures,” may contain statements relating to current expectations and plans that are “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact are forward-looking statements. You can identify such statements by words such as “future”, “intend”, “expect”, “go-forward” and “may” and the negative of these or similar terms and phrases. These forward-looking statements generally relate to the Company’s plans, objectives and expectations for future plans and events and are based upon its management’s current estimates. These statements are subject to risks and uncertainties and may not prove to be accurate. These risks and uncertainties include those associated with the progress of industry and other supply chain transparency and smelter or refiner validation programs for Conflict Minerals (including the possibility of inaccurate information, fraud and other irregularities), inadequate supplier education and knowledge, limitations on the ability or willingness of suppliers to provide more accurate, complete and detailed information, limitations on the Company’s ability to verify the accuracy or completeness of any supply chain information provided by suppliers and other factors discussed under the heading “Risk Factors” as described in the Company’s annual report on Form 20-F filed with the SEC on February 28, 2025 and other documents subsequently filed with or furnished to the SEC. These forward-looking statements are made only as of the date hereof, and, except as required by applicable law, the Company undertakes no obligation to update or revise the forward- looking statements, whether as a result of new information, future events or otherwise.