Australian data center operator GreenSquareDC is partnering with a materials company to develop and test a new type of heat sink using graphite.

Via an ASX announcement this week, Green Critical Minerals said it is partnering with GreenSquareDC to collaborate on the development and provision of new thermal management products in the latter’s data centers.

The partnership will look to use Green Critical’s very high density (VHD) graphite as a solution for heat management challenges in data centers. The company says the material can outperform traditional materials like copper and aluminium for thermal management in dense AI-focused hardware.

Under the terms of the agreement, the companies will collaborate around assessing the commercial viability of jointly developed, specially designed thermal management products for GreenSquareDC’s data centers.

Green Critical Minerals’ managing director, Clinton Booth, said: “This is a truly exciting tangible step forward in our targeted customer qualification program and a strong indication of the rapid progress we’ve made in a short period of time.”

He continued: “Building on the recent successful machining of our first prototype heat sink, and with a formal agreement now in place with a forward-looking, sustainability focussed data centre operator and developer, we are demonstrating real capability to deliver a lighter, more efficient, sustainable and commercially viable alternative to traditional heat management materials.”

The company said that while materials like pyrolytic graphite offer good thermal performance, they have remained “too expensive and impractical” for large-scale adoption – nuclear and pyrolytic graphite reportedly sell for more than US$1,000 per kg in some markets – forcing industries to rely on cheaper but less effective materials such as copper and aluminium. It’s VHD graphite, however, can be manufactured more cheaply, offering a new alternative.

Green Critical claims its lightweight graphite’s thermal diffusivity is three times greater than aluminium and standard graphite, and 2.6 times greater than copper (despite being 80 percent lighter than the latter.

Developed by Professor Charles Sorrell and a team from the University of New South Wales, Australia, the company acquired exclusive rights to VHD Graphite in 2024. The material reportedly does not require any specialized infrastructure or complex manufacturing techniques, relying instead on a proprietary process that is quicker and less energy-intensive than traditional graphite production.

This month saw Green Critical announce the successful machining of its first VHD Graphite heat sink – proving its ability to manufacture prototypes for real-world testing – as well as its first customer request for application-specific sample testing. The company is targeting full commercialization by H1 2026.

The company said it has been actively engaging with a range of potential customers across North America, Europe, and Australia, including both end users (OEMs and data centre operators) and intermediaries (machining shops and component manufacturers), and discussions are underway with several additional potential customers.

Historically, a mineral exploration and development company, Green Critical has rights to the McIntosh Graphite Project site in Australia.

GreenSquare launched in October 2022 with plans to develop a data center in Perth, Western Australia. Swiss private equity firm Partners Group acquired the company earlier this year, at the same time announcing it had acquired a former IBM facility in Sydney, New South Wales.