EcoGraf secures German offtake deal for Tanzanian graphite project

Diversified battery anode company EcoGraf has executed a binding term sheet for a planned 10-year offtake agreement with an undisclosed major German graphite trader for natural flake graphite from its Epanko Graphite Project in Tanzania, strengthening the company's project financing process and European sales base.

In a regulatory filing released Aug. 12, the ASX-listed company said the agreement covers 20,000 metric tons/year from the start of production at Epanko, rising to 40,000 mt/year after the first five years.

EcoGraf did not name the buyer due to contractual confidentiality obligations, but described the counterparty as "an established European graphite trader supplying industrial end users in Europe and international markets."

Pricing under the agreement will be based on market reference prices, incorporating a floor price and adjustments for flake size and carbon grade, EcoGraf said. Sales will be conducted on a free-on-board basis from the Port of Dar es Salaam.

EcoGraf said the term sheet replaces a previous agreement and constitutes a preliminary agreement under German law, with the parties expected to negotiate definitive long-form contracts. Completion and implementation remain subject to customary conditions precedent and project financing requirements.

The new term sheet, together with EcoGraf's existing 20,000 mt/year binding offtake agreement with tk accles Trading GmbH, formerly ThyssenKrupp Metallurgical Products, takes the company's contracted European sales to 40,000 mt/year from the start of production.

Once the new agreement steps up to 40,000 mt/year after five years, that volume alone would account for about 55% of Epanko's initially planned production capacity of 73,000 mt/year.

EcoGraf said the increased contracted volumes support its project financing process and its evaluation of staged expansions beyond Epanko's initial production capacity. The company also cited rising European demand for secure and diversified graphite supply chains as a factor supporting the offtake outlook.

Epanko's production targets are based on an updated bankable feasibility study released Feb. 25, with ore reserves derived from mineral resources comprising 43% measured and 57% indicated, over a 22-year mine life. The company said no inferred resources were included in the ore reserve or production targets.

Natural graphite, which accounts for about 95% of the active material in lithium-ion battery anodes, is critical to battery production. EcoGraf's integrated strategy, combining mine production with downstream purification facilities, is designed to capture higher-value segments of the graphite supply chain as automakers and battery manufacturers seek secure, traceable sources of battery-grade graphite.

The global natural graphite market is dominated by China, which accounts for about 80% of global production, according to S&P Global Market Intelligence. Western companies and governments are increasingly seeking to diversify battery material supply chains away from China, with Tanzania emerging as a key jurisdiction for graphite development.

Platts, part of S&P Global Energy, assessed natural flake graphite on a CIF Northeast Asia basis at $550/mt on Aug. 12, stable day over day and week over week. The price reflected material in Northeast Asia, normalized to Japan's main ports.