Volt Resources Ltd (ASX:VRC) has signed a second binding offtake agreement for graphite from the company’s pre-production Bunyu project in Tanzania, taking the total annual commitment to 10,000 tonnes.
The agreement with major Chinese graphite company Qingdao Tiangshengda Graphite is for 9,000 tonnes annually from stage I production over five years with an option for a further five-year term.
This follows a previous binding agreement with US-based graphene company Nano Graphene Inc.
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Volt’s chief executive officer Trevor Matthews said: “We are very pleased to secure this significant binding sales agreement for our Bunyu product and are delighted to be partnering with such a highly-respected company such as Tianshengda.
“Furthermore, this second binding offtake agreement is a strong validation of the confidence in Volt’s Bunyu Graphite Project.
“With strong demand in the market and in particular for large flake graphite, we are continuing to progress discussions with additional parties in respect to further offtake opportunities.”
Agreement incorporates size ranges
The Tianshengda agreement will incorporate the size ranges of products to be produced in the stage I development and the planned expansion to stage II at Bunyu.
It is conditional upon Volt’s subsidiary Volt Graphite Tanzania (VGT) confirming that it has completed the construction and commissioning of the stage I project for mine development.
VGT must also complete the processing plant for the treatment of sufficient ore from the project.
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The selling price will be in US Dollars and CIF Qingdao Port, China, to be determined by the prevailing market price for flake graphite products, adjusted for mesh size and TGC percentage.
It will be agreed before the start of each contract half year.
Integrated graphite processor
Based in Laiki City, Shangdong Province, Tianshengda is an integrated graphite processor and distributor across China and internationally.
Tianshengda has substantial annual capacity to further process graphite by producing value-added products including expandable graphite, flake graphite and powder, as well as supplying graphite to the lithium-ion battery market.
Growing flake graphite demand
The agreement provides VGT and the Bunyu project exposure to the anticipated growing demand and stronger prices for quality flake graphite.
Matthews said: “Looking ahead we now remain firmly focused on driving the Bunyu project towards first production and look forward to providing shareholders with further updates on corporate and operational progress in the near-term.”