StratMin Global Resources (LON:STGR) has made its first shipment from the Loharano Graphite plant in Madagascar.
In all, 20 tonnes of high-quality flake graphite have been delivered to the container port at Taomasina for shipment to a customer in the United States.
Chairman Gobind Sahney said: "This maiden shipment represents an important milestone for StratMin.
“It also demonstrates the company's ability to explore, extract, and ship graphite. The board and I would like to congratulate all parties involved on our first shipment."
StratMin’s Madagascar operation will target production of a premium large flake product that is between 40 and 80 mesh (this measures the particle scale size and represents the product in the most demand) and 94%-plus carbon.
The firm expects to be able to sell its product for US$1,400-US$1,600 a tonne, with extraction costs in the order of around US$500 a tonne.
Its graphite is embedded in soft rock and clay and unlike the material located in hard rock it is a relatively simple process to liberate, making it very cost effective to mine. It should also ensure StratMin is one of the lowest cost producers around.
The plan over the next two quarters is to progressively ramp up output to 1,000 tonnes a month.
At this level the company becomes enormously cash generative, which marks it out from many other juniors on the AIM market.
The next step will then be to double annual production, which would really mark the company out as a mover and shaker in the world of graphite.
Graphite is one of the most interesting areas in mining at the moment, and one driven by the same fundamentals as rare earth elements.
China is both the world’s largest producer and consumer and there is the expectation of a constrained supply with an associated rise in demand for this vital resource.
Graphite is used in steelmaking and in lithium-ion batteries used in electric cars. However, the work of Nobel prize-winners Andre Geim and Konstantin Novoselov suggests graphite, or to be more precise thin slivers called graphene, has the potential to revolutionise consumer electronics.
Samsung and Nokia are already engaged in high level studies to incorporate this product into their devices.
Last year total world consumption was 1.1 million tonnes, although only 400,000 tonnes was the sought-after large flake variety produced by StratMin.