Talga Group (ASX:TLG) entered a non-binding letter of intent with Japanese trading and industrial materials firm Hanwa Co. for a potential offtake and strategic partnership in Talga's Vittangi anode project in Sweden, according to a Monday filing with the Australian bourse.

The parties plan to discuss a binding long-term offtake deal for the supply of Talnode graphite anode products from the project to Hanwa and its customers on preferential terms, per the filing.

They also plan to negotiate a binding agreement for Hanwa or other Japanese investors to invest in the Vittangi anode project. The terms of the project-level investment will be decided following due diligence.

The letter of intent targets due diligence and term sheet agreement in the third quarter, and the execution of definitive deals in the fourth quarter, the company said.