BlackEarth Minerals NL (ASX:BEM) has signed an Offtake and Supply Agreement with Technografit GmbH, Germany, a world-leading supplier of graphite concentrate and downstream products, which will see the BlackEarth/Metachem JV acquire up to 2,500 tonnes per annum of suitable graphite concentrate from Technografit to feed proposed operations in India.
The agreement, facilitated by BlackEarth’s sales and marketing partners in Europe, LuxCarbon, provides certainty of supply of graphite concentrate for BEM’s Expandable Plant development, before product can be directly supplied from its Maniry operations.
LuxCarbon will work closely with Technografit to ensure its end-to-end supply chain is managed to a world-class level.
Technografit is a world-renowned leader in trading mineral raw materials, graphite sales and distribution in Europe, while BEM is a vertically integrated graphite developer with advanced mining projects in Madagascar and base metal prospects (nickel-copper-PGE) in Western Australia.
BEM’s flagship Maniry Graphite Project is in Southern Madagascar, with a bankable feasibility study (BFS) underway and a focus on value added products which are in high demand.
BlackEarth is reviewing several downstream value-added graphite processing opportunities.
Terms of the agreement
Technografit will supply graphite concentrate from a range of pre-qualified sources for the phased start of the BlackEarth/Metachem JV operations in accordance with specifications required and will also work closely with Luxcarbon to ensure product from BEM’s expandable graphite operations is produced to the required specification.
It will also ensure that supplies continue on a regular and consistent basis to meet short-term demand and BEM’s ambitions for longer-term supply worldwide.
The agreement works for both parties with key terms including:
- BlackEarth will buy from Technografit up to 2,500 tonnes per annum of graphite concentrate from the commencement date of its JV operations in India;
- BlackEarth may act as agent for JVCO and payment for the product may be made by either BlackEarth or JVCO in the future;
- Technografit must ensure the graphite concentrate provided to the buyer is supplied to the specification required and nominated by BlackEarth and/or their agents;
- The commencement date is February 1, 2022, or some other later date nominated by BlackEarth when its JV operational plant has been completed;
- The acquisition of the product shall be based on negotiated and agreed market prices at the time of agreement; and
- The product pricing shall not be fixed or based on any other mechanism proposed or contemplated unless the parties subsequently and mutually agree to this.
Agreement boosts BEM JV
“This agreement provides an enormous boost to our JV with Metachem and the development of our plant in India and now completes our supply chain which will underpin our operations,” BlackEarth managing director Tom Revy said.
“The agreement guarantees our Indian operations a supply of world-class concentrate to feed our operations for the next few years prior to supplying product from our own operations at Maniry in Madagascar.
“We can now move forward quickly knowing that we not only have a product offtake agreement in place (with Grafitberbau, Austria) to sell the expandable graphite we produce, this agreement also provides us with immediate access to world-class concentrate to ensure we are able to produce and sell quality high value product in the short term.
“The agreement also assists to underpin our proposed plant development in Madagascar, as concentrate from this development will be provided to our downstream operations with Metachem as soon as this is available.
“Our relationship with Techniografit and Luxcarbon further broadens our association with industry leading graphite product developers in Germany who have access to markets for expandable graphite and other downstream products in Europe and Worldwide.”
BEM and Techniografit already have a relationship.
Techniografit managing director Dominik Georg Luh is the fourth generation of the Luh family, which has been dealing in graphite for 110 years and has previously worked with members of BEM’s management team in developing supply chain operations into Europe and Asia.
Demand increasing
The agreement comes at a time when demand for expandable graphite is quickly growing.
The Global Expandable Graphite Market is expected to grow from US$202.8 million in 2020 to around US$351. 9 million by 2027.
Expandable graphite demand and growth – Source:- Benchmark Mineral Intelligence.
Interestingly, approximately 35% of expandable graphite production is processed into fire retardants – the single biggest end market for expandable graphite.
Fire retardent use as a portion of expandable graphite demand and growth – Source:- Benchmark Mineral Intelligence.
The remaining product is processed into flexible graphite which is the precursor to several end products such as graphite foils for use in the automotive, EV and alternative energy sectors.
Rapid demand growth is also forecast due to the increasing use of high energy density batteries in mobile devices.