BlackEarth Minerals JV to fast-track development of graphite processing facility in India

ASX-listed graphite mine developer BlackEarth Minerals, or BEM, and its 50:50 joint venture partner Metachem, an Indian graphite producer, plan to fast-track the development of its proposed expandable coarse flake graphite processing plant after acquiring a development site in India's Pune region, the company said July 21.

India was chosen for the site as "it is a really interesting global manufacturing hub for all industries...with democratic government, political encouragement, technical skills and market knowledge," BEM CEO Tom Revy told S&P Global Commodity Insights.

Acquisition of the site in the Special Economic Zone in Pune is due to close on July 30 and local engineers have been appointed to oversee the plant's development, BEM said in a statement.

The venture, called Panthera Graphite Technologies, expects to start site development in September 2022, with completion planned in early 2023 and trial processing to start immediately thereafter.

The JV aims to start graphite supply from the plant in the second quarter of 2023.

The BEM board previously approved a final investment decision for the plant, which is due to produce 2,000-5,000 mt/year initially and be expanded to 4,000-5,000 mt/year from the fourth year of operation.

The JV plans to source the graphite concentrate for the plant from external parties for the first two years of operations, with BEM's Maniry graphite project in Madagascar to supply the plant from the third year.

According to the project's feasibility study, stage one capex is expected to be $3 million, with gross revenue forecast at $7 million in the first year of production and rising to $18-20.5 million.

The project has a post-tax net present value of $78 million and a payback period of 1.2 years.

The JV previously signed a binding offtake agreement with Austria-based downstream processing company Grafitbergbau for the supply of all initial production from the plant.

Huge demand

"Europe will be our principal market moving forward," Revy said in an interview. "There is huge demand for all types of graphite."

He added that demand for coarse graphite material may be growing 8%-10% a year and that a market shortfall can be expected to bite as soon as 2023-24.

The market for fine material for the electric vehicles sector may now be growing as much as 30% a year while a 2-3% annual demand growth is foreseen for graphite used in refractories for smelters, according to Revy.

Revenues from the India processing venture should help finance development of the Maniry project, where the company expects to complete a definitive feasibility study in October, he said.

The Maniry mine is planned to start production in 2024 to produce some 30,000-40,000 mt/year of jumbo flake graphite in concentrate with a grade of 95%-96%.

The initial mine life was put at 12 years with a possibility of resource expansion to up to around 22 years, Revy said.

However, the new mine capacity currently envisaged -- at Maniry and elsewhere -- still won't be sufficient to fill the supply gap in the market, according to Revy.

"It's gone exponential in terms of offtake demand," he said.

Battery mineral prices in general have been strong in 2022, with Platts' seaborne lithium carbonate and lithium hydroxide assessments up 111.2% and 136.6%, respectively, since the start of 2022 at $71,400/mt CIF North Asia and $75,000/mt CIF North Asia as of July 21, according to S&P Global Commodity Insights data.