BlackEarth Minerals NL (ASX:BEM) has made positive progress towards signing legally binding agreements for its proposed downstream processing graphite plant joint venture (JV) with Metachem Manufacturing Company Pvt Ltd.
The company signed an MOU with Metachem in late June 2021, following which, further work has been undertaken with the preparation of a Stage 1 plant development plan.
Promisingly, several potential development sites have been selected with a final decision on the preferred site imminent.
“Very attractive outcome”
BlackEarth managing director Tom Revy said: “We have undertaken an enormous amount of work with our colleagues at Metachem in progressing this exciting development for the company.
“Apart from progressing toward agreement on the terms of binding JV agreements, we have been active in developing a production plan, assessing proposed sites that offer economically attractive solutions and also assessing proposed supply arrangements with our marketing and supply partners in Europe.
“This is potentially a very significant development in the growth of our company and we’ve undertaken a lot of work toward concluding binding JV agreements that suit our strategic short- and long-term business goals.
“We believe the terms that should be concluded offer a very attractive outcome and we look forward to updating the market with the full details of this in the short term”.
JV progress
Senior executives of both BlackEarth and Metachem have held numerous meetings over the past 2-3 months to discuss a range of development matters including site selection, development plans, graphite concentrate supplies and concluding the terms of the proposed binding JV agreements.
All material terms to the binding JV agreements are now approaching final with signing, after the incorporation of a JV company, anticipated to occur in the short term.
The JV’s stage 1 plan proposes the commencement of plant development immediately upon the execution of the binding JV agreements and the incorporation and capitalisation of the JV company, with production anticipated to begin in the September quarter of 2022.
Importantly, the potential development sites are located within Special Economic Zones (SEZs) in India which can offer significant tax, power and other economic concessions to developers.
Projected worldwide supply shortages
Proposed JV partner, Metachem, is globally recognised as a leading producer and supplier of world-class expandable graphite
BlackEarth has secured a binding commitment from global graphite downstream processing leaders, Grafitbergbau, Austria to buy up to 2,500 million tonnes per annum of the proposed JV’s production of expandable graphite
The company expects demand for the proposed JV’s expandable graphite product would rapidly expand to meet projected worldwide supply shortages.