As demand for lithium-ion batteries continues to grow, more manufacturer’s are seeking to secure long-term supplies in preparation for forecast supply shortages with graphite being a key ingredient within electric vehicle batteries.
In the last month, we have seen two major offtake agreements signed by graphite companies operating in Africa, highlighting an impending supply squeeze which graphite-needy businesses are seeking to curb.
“I believe changes in supply will positively impact prices over the next 2 years as China is likely to be a net importer of natural flake due to increased costs, continued environmental pressures and greater domestic demand,” said Tom Revy, Managing Director of BlackEarth Minerals, during an investor briefing.
As identified by Revy, it is Asian companies looking to sure up their supply with Syrah Resources having this week announced offtake agreements with China’s Qingdao Freyr Graphite Co Ltd, to supply 6,000 tonnes of graphite over the next 12 months from their Balama mine in Northern Mozambique.
This follows an agreement signed by Nextsource Materials to commit 20,000 tonnes of graphite per annum from Nextsource’s Molo Project in Madagascar.
As graphite producers operating in Africa continue to gather global attention from rising commodity prices, BlackEarth Minerals (ASX: BEM) is on track to deliver results of a scoping study from their Maniry Project, located just 60km from the Molo Project.
Having known the high-grade quality of graphite located at Maniry through utilising the same geology team that worked on Molo, BlackEarth, through their fast-track to production milestones, have significantly advanced their project since listing on the ASX in January 2018.
“We are currently on track to announce an increase in our Maniry Resource, the outcomes from our current detailed metallurgical program and the completion of our Scoping Study all before Christmas,” said Revy.
“This data has given us the confidence to charge ahead with our current programs as well as to start planning our feasibility study which we aim to start and largely finish next year.”
“We believe the graphite mineralisation contained in Razafy is remarkably uniform and this will assist us in potentially producing a consistent and predictable product for future offtakers.”
With China, for a long time the world’s main supplier of graphite, set to become a net importer of the commodity next year, offtake partners are quickly circling projects in Africa to minimise the impact of increasing graphite prices and BlackEarth Minerals could be next in line.