Flinders Resources (CVE:FDR) said on Wednesday that next month and May its marketing team will travel Europe, North America and Asia to demonstrate the Woxna high-purity spherical graphite samples to tap into rapid battery cell production growth.
The tour will focus will be on auto and battery cell manufacturers, with the aim of developing commercial relationships that will enable Flinders to permit and construct a high-purity graphite plant adjacent to its existing operational concentration facility.
Flinders's 100-per-cent-owned Woxna mine and concentrator in Sweden is the only publicly listed modern full-scale, fully permitted (100,000-tonne-per-annum feed) operational graphite production facility.
This facility has been fully commissioned and remains in a production-ready state until refractory-grade graphite concentrate demand increases. This traditional graphite market is weak currently due to slow industrial markets that are showing little chance of rebounding in the short term, particularly with slowing growth rates in Brazil and China.
Flinders believes it can produce value-added products to offset this downturn in the traditional graphite market. The company's revenue stream can be enhanced by including value-added products such as spherical high-purity, battery-grade graphite in its product lines.
Flinders, with its Chinese technology partner, is now finalising a flow sheet for the production of high-purity, battery-grade graphite at the Woxna facility.
This processing technology is based on the world's only commercially-proven purification methods that are used in China to supply the current global demand for high-purity graphite demand. China is the only source for natural flake graphite processed to a quality suitable for the battery cell manufacturers. This technology has been used to produce high-purity graphite samples from concentrate produced at the Woxna mine in Sweden.
The market is growing for battery-grade uncoated spherical graphite with orders continuing to grow and volumes increasing which is driving prices upward in excess of 3% in the fourth quarter 2015. Chinese electric vehicle production increased to over 340,000 units last year, up nearly 140% in the fourth quarter of 2015 alone. This rapid growth in demand for batteries is expected to see sales of spherical graphite continue to grow.
The lithium-ion battery is a significant part of the energy storage market which is driven primarily by the growing uptake of hybrid and electric vehicles. Benchmark Mineral Intelligence estimate that approximately 90% of spherical graphite produced around the world is used in energy storage.
There is approximately 10 times more graphite than lithium required in a lithium-ion battery. Traditionally spherical graphite has been made from artificial graphite because of its high quality and purity. Synthetic graphite is manufactured from oil refining byproducts which is a very energy-intensive and expensive process. Battery manufacturers are seeking alternatives to expensive synthetic graphite, and high-purity natural flake spherical graphite is the preferred option.
"Flinders is at the leading edge of an emerging industry that could be a game changer. With a fully permitted and operational mine and concentrator, we are able to produce graphite concentrate stock to feed into a proven commercial purification flow sheet," said Blair Way, president and chief executive officer.
"This is a significant milestone and key differentiator for Flinders in the graphite sector. No other public Western world graphite company has established these key components necessary to be a supplier of battery-grade graphite," he added.
Earlier this month, Way spoke to Proactive Investors about his focus with operations at Woxna. Hear the interview here.
Flinders shares were 1.9% higher at C$0.28 - a one-week high.