Tirupati Graphite PLC (LSE:TGR, OTCQX:TGRHF) declared the start of commercial production from the Vatomina project in Madagascar, effective December 6.
It marks the completion of the Vatomina plant's commissioning process and confirms the facilities are now stabilised to allow continuous, round-the-clock operations with the capacity to produce 9,000 tonnes of flake graphite per year.
Vatomina's commissioning began in September and had experienced bottlenecking, nonetheless a recovery rate of 90% was recorded – beating a target of 85% - and achieved the targeted product grade of up to 96%.
"We are delighted that Vatomina has successfully ramped-up to commercial production so quickly and smoothly,” Tirupati executive chair Shishir Poddar said.
“The lessons we have learnt from this project will be captured to enhance our other ongoing and planned new capacity developments.
“The significant production we are adding will transform Tirupati into a globally significant supplier of primary flake graphite and speciality graphite and enhance the company's trading position going forward. We look forward to updating the markets further as we progress."
Tirupati’s total flake graphite capacity now amounts to 12,000 tonnes per annum and the company aims to increase that to 30,000 tonnes by mid-2022, before an 84,000 per annum target by the end of 2024.
The expansion plan includes some 54,000 tonnes of additional capacity at Vatomina and an 18,000 tonne per annum expansion at the Sahamamy project due to complete in the second quarter of 2022.
Tirupati told investors that flake graphite production and sales are expected to exceed 4,000 tonnes for the second half of the current financial year, up from 1,060 tonnes in the first half.
It forecasts volumes to rise to 20,000 tonnes in the financial year to March 2023, driven by expected strong and growing mid-term and long-term demand for flake graphite due to its critical role in the energy transition economy.
Additionally, the company said its growth profile will further be expanded upon completion of its deal to acquire Suni Resources in Mozambique, which adds two advanced stage projects with licensed capacity to produce up to 150,000 tonnes of flake graphite per year.