South Star Battery Metals Corp, the project developer, is poised to strike an offtake deal with Graphex Group Ltd for up to 50,000 tonnes of natural flake graphite concentrate over five years from its Santa Cruz project in Brazil and the Ceylon asset in Alabama, USA.
The concentrate would be used in the uncoated and coated spherical graphite (SPG) markets used in lithium-ion batteries (LiB) where Graphex is a global leader and has been producing batteries for electric vehicles (EVs) and more in Jixi, China since 2008 and transacting commercially since 2013.
In a letter of intent (LOI) inked on March 22 this year, both parties agreed to negotiate a binding offtake agreement within 60 days of signing.
"We are pleased to be forming this strategic partnership with Graphex and look at this as the start of a long-term relationship," said Richard Pearce, CEO of South Star. "South Star has high-quality, scalable graphite assets that are coming on-line in the very near-term, and we will be the first new graphite production in the Americas in over a decade. Our concentrates have been tested for LiB applications and performed exceptionally well."
READ: South Star Battery Metals wins approval from Brazilian mining authority for final exploration reports for Santa Cruz Mine
He added: "Graphex has been producing uncoated and coated SPG for years in China, has deep commercial relationships in this sector and is expanding into new strategic jurisdictions such as North America."
John DeMaio, the president of the graphene division of Graphex, said: "With demand for natural graphite anode material predicted to significantly increase year over year to keep pace with EV projections, new sources of raw materials from diverse geographical regions will be essential for stable, predictable supply chains."
South Star Battery Metals is advancing near-term production projects in the Americas. Its Santa Cruz graphite project, in southern Bahia, Brazil is the first of a series of battery metals projects that will be put into production.
The asset is fully licensed and construction ready for Phase 1 operations with at-surface mineralization in friable materials, and successful large-scale pilot-plant testing has been completed.
The next project in the pipeline is a development project in Alabama in the middle of a developing electric vehicle, aerospace and defence hub in the southeastern United States.
Contact the author at giles@proactiveinvestors.com