Tirupati Graphite PLC (LON:TGR) has raised £10mln in a share placing to expedite its modular medium-term development plan to take advantage of strong market demand for graphite.
It is selling a total of 11.1mln new shares priced at 90p each, marking a discount of 8.6% to Thursday’s closing market price.
"We are delighted to have received such strong support in completing this oversubscribed placing, which further strengthens our confidence in our strategy and enables us to fast track our development plans to fulfil the increased demand for our graphite products,” said Shishir Poddar, Tirupati chief executive.
"Having developed a suite of graphite products spanning a variety of applications, utilising our unique sustainable processes and technologies, we are ideally positioned to competitively support the fast-emerging green graphite supply chain.”
“The potential green economy applications for our graphite products provides us with the opportunity to play an important role in the global efforts to reduce carbon emissions and the impacts of climate change.”
With the injection of funds, the company said it intends to accelerate the development of its next 18,000 tonnes per year module for the Sahamamy primary flake graphite project in Madagascar, increasing capacity up to 30,000 tonnes per year by the first quarter of 2022.
It plans to redevelop hydropower facilities at Sahamamy so that the project’s current power requirements can be satisfied by renewable energy, and, it will carry out a feasibility study for 900 kilowatts of additional hydropower to cover the upgraded operation.
Tirupati said it will also increase capacity in its downstream speciality graphite projects to 16,200 tonnes per year, from 1,200 tonnes, by the first half of 2022.
It will additionally enable a fast-track installation of industrial-scale graphene manufacturing capabilities in order to capitalise on near-term commercialisation opportunities.
"With increasing global adoption of electric mobility we are confident that the timing is opportune for us to expedite our developments,” Poddar said.
The Tirupati chief executive highlighted research by the World Bank which claims graphite production volumes will need to rise by around 500% to support clean energy transition – he highlighted that that would translate to a 22x increase in battery requirements over this decade, as natural flake graphite demand grows 700% to around 5.9mln tonnes.
"We believe the commercialisation of graphene applications is on the cusp of rapid growth as well, with the market size forecast to breach the billion-dollar mark over the next two to three years,” Paddar added.
“Moreover, the promulgation of the first international ISO standards for graphene is testimony to the forthcoming opportunities which we believe should boost adoption by end-users.
“The progress we have made within our graphene division is particularly exciting and we are poised to deliver ISO standard graphene on a commercial scale to buyers in the aerospace, defence, battery storage, electronics and other key sectors working on graphene-based applications.”