(Bloomberg) -- Shares in Australian synthetic graphite maker Novonix Ltd. surged after it received a conditional $755 million loan from the US Department of Energy to build a manufacturing plant in Tennessee. 

Novonix rose as much as 16% on Tuesday and was up 9.4% at A$0.64 a share at 11:03 a.m. Sydney time, valuing the company at A$361 million ($230 million).

The new plant will annually produce about 31,500 tons of synthetic graphite, which is key to manufacturing lithium-ion batteries in electric vehicles and smart phones, Novonix said in a statement Tuesday. The material will primarily be destined for EV makers in North America. Battery-grade graphite can either be mined or produced synthetically.

Funds are contingent on a binding loan agreement with the Department of Energy and due diligence, according to the statement. The department said in a separate statement that the conditional commitment isn’t final and could be reversed by the Trump Administration if not completed by the Jan. 20 inauguration.

China currently holds a 95% market share for battery grade graphite, according to Novonix. The nation has recently moved to control exports of the battery component, a move that alarmed the West. 

“Recent announcements from China to further scrutinize the export of battery-grade graphite to the US highlight the importance of domestic production of high-performance, battery-grade synthetic graphite,” Novonix Chief Executive Officer Chris Burns said in the statement. 

The company already has binding offtake agreements to supply Panasonic Energy Ltd., Stellantis NV, and PowerCo SE. 

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