Gratomic Inc. (TSX-V:GRAT, OTCQX:CBULF) revealed that it has inked a non-binding Letter of Intent (LOI) with Graphex Group Limited and its US subsidiary, Graphex Technologies (OTCQX:GRFXY, HKG:6128) LLC, a leader in the downstream processing of natural graphite used in electric vehicle (EV) lithium-ion (Li-ion) batteries.
The multinational company with projects in Namibia, Brazil, and Canada, said that the LOI aims to combine Gratomic's raw material supply capabilities with Graphex's downstream processing expertise to solve an industry-wide supply-demand gap by delivering “an end-to-end supply of graphite from mine to battery” with facilities to be in North America.
Following the LOI, Gratomic and Graphex plan to negotiate the terms of a Joint Venture (JV), including management and ownership structures, to jointly produce coated spherical graphite anode material for the EV/battery market.
READ: Gratomic posts assay results from promising Aukam graphite project in Namibia
Graphex will license and/or contribute its technology and expertise to the JV and Gratomic will provide security of raw mineral supply, said the company. Graphex will provide all the technology, plans and expertise for building and operating the plants. Graphex has existing processing facilities in Asia and has also secured and is developing a site in Warren, Michigan that is being designed to produce 15,000 tons per annum (tpa) of battery anode material.
Significantly, Gratomic is the holder of 100% interests in the Aukam property in Namibia and the Buckingham property in Quebec, as well as mineral claims in Capim Grosso in Brazil, from which Gratomic intends to develop operating graphite concentrating facilities.
“Gratomic shall remain entitled to enter into supply agreements with third parties for raw material not committed to the JV,” noted the company.
Match made in heaven
In a statement, Gratomic CEO Arno Brand said: "We’ve been working diligently for a long time to find a perfect match in a downstream processing partner to enable full cycle anode inclusion of our Graphite product.”
“The collaboration between Gratomic and Graphex now brings forth a combination…unmatched in its ability to present real life mining experience with real life downstream processing experience. We’re very excited to move forward with our due diligence and expeditiously enter into a long-lasting relationship with Graphex," he added.
Meanwhile, Graphex Technologies (OTCQX:GRFXY, HKG:6128) CEO John DeMaio said the collaboration with Gratomic opens “potential new streams of raw material to meet the coming tidal wave of demand.”
Graphite is the primary anode material in EV batteries. Typically, graphite is mined and concentrated to 95% purity by companies like Gratomic. The mine concentrate is then shaped, purified, and coated to create the critical EV battery anode material in a downstream process by firms like Graphex.
The supply picture for natural graphite in North America is marked by a shortfall of graphite raw material from regions outside China, and the absence of experienced downstream processing capability to transform that raw material into battery-grade anode material.
Now the new collaboration solves both issues by providing OEMs and battery makers with a “transparent, ESG compliant supply of quality product needed to meet current and future demand,” said the company.
Graphex has a history of processing mine concentrate and produces 10,000 tpa of high-quality battery anode material.
Given the emphasis on creating domestic US supply chains as promoted through the Inflation Reduction Act, the collaboration represents “a significant advancement” toward establishing a domestic supply chain for graphite anode material a reality, noted the company.
Meanwhile, Gratomic is working towards completing a feasibility study on its Aukam processing plant. The study will provide recommendations relating to the scale-up of the existing processing plant to a commercial scale processing facility capable of producing concentrate grades and production rates, said the company.
Contact the author Uttara Choudhury at uttara@proactiveinvestors.com
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