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Ceylon Graphite has purest deposits in world just as demand is set to soar, believes CEO

The company has 121 sites under licence with work underway currently at four of these.
The military uses lots of graphite in gun barrels

Ceylon Graphite Corp (CVE:CYL) has the purest deposits in the world believes Bharat Parashar, the Canada-listed group’s chief executive.

“Our worst grade is 90% pure,” he told Proactive, while the best is nudging 98% and higher.

WATCH: Ceylon Graphite keen to supply the lithium-ion battery market with it high-grade graphite

That compares favourably with the best grades out of Africa, he says, while other mines around the globe are lucky to get between 30-50%.

Why this is so important is due to the incoming electric vehicle and energy storage revolution – or decarbonisation – that is rapidly approaching.

Batteries will fuel EVs and help smooth the undulations that the weather can mean for renewable energy sources such as solar and wind.

One of Parashar’s favourite quotes is from Tesla founder Elon Musk, who said lithium ion batteries really should be renamed nickel-graphite due to their make-up.

Parashar eventually intends to build a plant to convert the graphite mined from its sites in Sri Lanka into the 99.95% grade required for batteries.

That grade means it can be used for anything or everything graphite needs.

High margin production

In the meantime, he will be happy to take the margin arising from a selling price of between US$2,500-US$3,500 per tonne and production costs of US$200 per tonne.

Ceylon Graphite is not yet in production, but that should happen early next year once permits come through.

The company has 121 sites under licence with work underway currently at four of these.

Ceylon Graphite’s deposits are veins, so rather like gold mining, once you hit the vein it just a question of following it, says Parashar.

K1 is the main focus, he says. Work there has gone down to 320 feet and Parashar is hoping to ramp production up to 3- 500 tonnes per month or 4,000 tonnes a year.

While that would be a small mine, exploration is also under at M1 where drillings results are available from fifty previously drilled holes.

More exploration success in December 

At P1 in December, the company reported a 20ft long surface vein, while at H1 it found three new veins 13 cm wide.

Parashar says that when he started to look at the possibility for a graphite mining operation in Sri Lanka he was stunned by the country’s previous production history.

Previous miners stopped, however, when they hit bedrock, but with modern techniques that is not a problem anymore.

“We tried to acquire all the pre-production sites we could.”

That is how Ceylon Graphite ended up with 121 licences and in time Parashar can see the company having tens of mines in operation.

Each costs about US$1mln to bring into production, he adds.

All are underground as open pit mining is not allowed in Sri Lanka, which also means agreement has to reached with the surface landowner for work to start.

Rain, rain go away

One problem is the amount of rain Sri Lanka gets and if someone has a mine de-watering solution he would like to hear about it.

Otherwise, Parashar thinks there is enough graphite to mine for at least thirty years but adds there might be substantially more.

Look at the long-standing Kahatagaha mine in Sri Lanka he says.

It opened in 1873 and is now down at a depth of 2,200 feet and still going strong. 

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