International Graphite Ltd (ASX:IG6, FRA:H99, OTC:IGRPF) earlier this week announced a binding joint venture agreement with Alchemy to establish a graphite processing hub near Venice, Italy, in what managing director Andrew Worland described as a “game changing” development for the ASX-listed company.
The proposed operation will be located at Alkeemia’s existing industrial site in Porto Marghera, leveraging significant infrastructure and operational synergies to lower development costs and accelerate execution. Alkeemia is one of Europe’s largest producers of hydrofluoric acid, a key reagent used in graphite purification.
Worland said the partnership represented a transformational opportunity for International Graphite as it expands its downstream processing capabilities into Europe’s growing battery materials and critical minerals market. He noted that the companies had been working together for approximately 18 months, developing both technical collaboration and commercial alignment before formalising the agreement.
The initial development is expected to target 10,000 tonnes per annum of graphite processing capacity, with plans to expand to 15,000 tonnes using internally generated cash flows. According to Worland, the project could be developed for less than A$15 million, benefiting from the extensive infrastructure already available at the Porto Marghera site.
He explained that the project would utilise Alkeemia’s workforce, laboratories, construction equipment, warehousing and operational support systems, significantly reducing upfront capital intensity compared with a standalone processing facility.
Worland also pointed to International Graphite’s existing micronising facility under construction south of Perth as a benchmark for the Italian project, noting that similar equipment and process flows would be deployed.
Potential catalysts for investors include the release of detailed project economics, including IRR and NPV estimates, financing updates and future expansion plans. The company also sees strategic value in strengthening its position within the European critical minerals supply chain as governments seek to diversify supply away from China.
Worland said the earnings profile of the project could be “unlikely to be replicated anywhere else in industrial minerals and certainly not the mining space” for a project of comparable capital intensity.
The managing director also stressed International Graphite’s disciplined capital management approach, noting that the company had completed only one capital raise in four years while advancing projects into construction.
Looking ahead, Worland said the partnership with Alkeemia could establish International Graphite as “the premier sort of graphite investment opportunity in the listed company space over the next six to 12 months”, with management now focused squarely on execution and delivery.
Interview highlights
- International Graphite (ASX:IG6) signed a binding joint venture agreement with Alkeemia to develop a graphite processing hub near Venice, Italy.
- Alchemy is one of Europe’s largest hydrofluoric acid producers and recently invested €80 million upgrading its facilities.
- The JV structure is 51/49 and will utilise Alkeemia’s existing operational infrastructure at Porto Marghera.
- Significant synergies are expected from using Alkeemia’s workforce, laboratories, warehousing and equipment.
- International Graphite expects the project to be highly cost competitive versus standalone graphite processing operations.
- The initial processing facility is planned at 10,000 tonnes per annum with expansion potential to 15,000 tonnes annually.
- Estimated initial capital cost is expected to be below A$15 million.
- Management believes the project could deliver strong IRR and NPV metrics.
- Andrew Worland emphasised the company’s disciplined capital management, highlighting only one equity raise in four years.
- The company believes the partnership could position IG6 as a leading listed graphite investment opportunity in Europe.
Proactive: Back to Proactive Investors. Ladies and gentlemen, I'm your host, Kerry Stevenson. Today I've asked Andrew Worland, the managing director of International Graphite, ASX code IG6. More importantly, International Graphite has entered into a binding joint venture with Alkeemia for a graphite processing hub near Venice, Italy. How good is that? Ladies and gentlemen. Now, smallish market cap, so I've asked Andrew to come on because I want to find out for our audience where the value is, why the agreement matters and what it sets up to be. Andrew, welcome to Proactive.
Andrew Worland: Thank you.
Proactive: Quickly, this announcement made today regarding the binding joint venture with Alkeemia— just give us the rationale and what it means for International Graphite.
Andrew Worland: It’s a game changing announcement for IG6 and a transformational transaction. Our efforts to develop downstream processing capability have come to fruition with this opportunity. Alkeemia is one of Europe’s largest producers of hydrofluoric acid, which is the only commercially proven reagent used to purify graphite.
They’re looking to build a new business in the graphite industry and dominate Europe, potentially export markets as well. They identified our commitment to downstream processing and our ability to execute, and have teamed up with us in a 51/49 joint venture to build a significant processing plant at their operational site in Porto Marghera near Venice.
Proactive: So you’re going to build a processing facility within their existing hub?
Andrew Worland: That’s correct. The synergies are remarkable and make the project highly cost competitive. All the people currently employed by Alkeemia will be available to work on the project. We won’t need to recruit a new workforce. They already have construction equipment, mobile equipment, warehousing, control rooms and laboratories on site that we can utilise.
The capital cost is remarkably lower than anything you’d do on a standalone basis. It’s almost a once-in-a-lifetime opportunity for International Graphite to partner with a company of Alkeemia’s prestige. They’ve just spent €80 million upgrading their hydrofluoric acid facilities, so they’re a serious business with strong support in Europe and Italy.
Proactive: Why did they choose International Graphite?
Andrew Worland: Business is relationship driven. We’ve been talking with Alkeemia for about 18 months regarding their purification ambitions and working with them through their pilot plant. We also share Japanese trading relationships through Tokyo-based alliances we’ve been developing.
They were confident in what we can deliver in terms of our intellectual property and process flow sheets. We developed a strong rapport over that period and we see the opportunity in a similar way. We’re not bogged down by bureaucracy and have moved quickly to execute a business plan that could give shareholders significant leverage into a larger business.
Proactive: Can you talk about the timeline, capex and opex?
Andrew Worland: Broadly speaking, investors know we’re currently building a micronising facility south of Perth. That’s around 7,500 tonnes per annum with a capital cost of about A$8 million. It’s a useful proxy because the same equipment and flow sheet will be used in Porto Marghera.
We’re looking to start at 10,000 tonnes per annum and expand to 15,000 tonnes using cash flows from the joint venture. We anticipate building 10,000 tonnes of production capacity in Italy for less than A$15 million.
The earnings profile from a sub-A$15 million investment is unlikely to be replicated elsewhere in industrial minerals or mining. The IRR and NPV should look fantastic and we hope to release those numbers soon.
Proactive: I’m going to call you the builders, not the explorers. Just wrap it up for me — where’s the value opportunity for shareholders?
Andrew Worland: Our market cap is relatively modest, but the capital commitment for this project is also modest relative to the earnings profile. We won’t necessarily need to raise all the capital through equity because there are other funding options available.
Shareholders gain exposure to that earnings profile without excessive dilution. We’ve only completed one capital raise in four years while delivering the Collie project now under construction.
Strategically, the partnership with Alkeemia is extremely important. They’re a serious business, and the platform we’re creating in Europe could make us the premier graphite investment opportunity in the listed company space over the next six to 12 months. Now it’s all about execution and delivery.
Proactive: Great to have you on the program, Andrew. Congratulations on the announcement regarding the binding joint venture agreement with Alkeemia. ASX code IG6. Thanks for joining us.
Andrew Worland: Thank you.