China has held a monopoly on global natural graphite production for over 30 years, producing around 60%-80% of the world's natural graphite.
But the large number of advanced development projects spread throughout the globe, combined with high prices, means that the geographical distribution of the natural graphite market is poised for change.
Demand for graphite is swelling as its use in the anodes of lithium-ion batteries increases, driving prices higher.
The Chinese price for flake graphite (94% C -100 mesh) has risen from US$530/t in September 2021, to US$830/t in May 2022, with prices forecast to US1,000/t by 2025.
European traded natural graphite, which trades at a premium to Chinese natural graphite, rose from US$980/t in September 2021, to US$1,400/t as of May 2022.
Higher natural graphite prices are likely to provide the incentive required for new natural graphite projects outside of China to come onstream.
As a result, some forecasters have suggested that China’s share of the global natural graphite market could reduce from 68% in 2021 to 35% by 2026.
Alongside the change in the distribution of the natural graphite market, the scale of the market is also expected to change, with a White House report on critical metals indicating that graphite demand for the energy transition away from fossil fuels will require 25-times more graphite by 2040 than was produced in 2020.
In this article, we take a look at some of these international natural graphite miners that are already in production and looking to increase their operations and those project developers poised to make the transition into production and benefit from any rise in natural graphite prices.
Producers
Northern Graphite
Northern Graphite Corp (TSX-V:NGC, OTCQB:NGPHF) has three advanced graphite assets. The company is currently operating the Lac des Iles (LDI) mine, in Quebec, producing 15,000 tonnes (t) of graphite per annum.
LDI is coming to the end of its life but Northern has signed an option to acquire the Mousseau West Project, which it plans to use to extend the life of the LDI plant.
The Mousseau West Project is 80 kilometres from the LDI plant and is considered by the company to be an economic trucking distance.
Northern plans to use the Mousseau West ore to increase LDI production levels to 25,000 tonnes per annum (tpa). The Mousseau West Project has an inferred Resource of 4.1 million tonnes (mt) a grade of 6.2% graphitic carbon (GC).
Alongside this the company is also upgrading its Okanjande-Okorusu Mine, which has been on care and maintenance. Okanjande-Okorusu has a fresh, measured and indicated resource of 24.2 mt at a grade of 5.33% GC, with an inferred resource estimate of 7.2mt at a grade of 5.02% GC and a weathered/transitional measured and indicated resource of 7.1 mt at a grade of 4.23% GC, with an inferred resource estimate of 0.6 mt at a grade of 3.41% GC
Northern recently completed a preliminary economic assessment (PEA) for the restart of its Okanjande-Okorusu Mine, which defined a post-tax NPV of US$65 million a post-tax IRR of 62%, assuming a 10-year mine life and an average graphite price of US$1,500/t.
The project is estimated to have an opex of US$775/t and a capex of US$15.1 million to re-start production. Northern aims to re-start production by mid-2023 at an average production level of almost 31,000tpa but in the longer-term Northern plans to build a large new 100,000-150,000tpa processing plant.
Its third asset, the Bissett Creek Project, has a NI 43-101 compliant mineral resource estimate of 69.8 mt of measured and indicated resources at a grade of 1.74% GC and 24 mt of inferred resources at a grade of 1.65% GC
An updated PEA published in December 2018 outlined an operation producing an average of 38,400tpa over the first 15 years. Opex averages US$642/t of concentrate and phase-one capex is C$106.6 million with an additional C$47.5 million for Phase 2 expansion capital.
Initial production levels of 40,000tpa are expected, expanding to 100,000tpa as the market grows This gives the project a post-tax NPV of US$198.2 million and a post-tax IRR of 25% assuming an average price of US$1,750/t for the concentrate. Construction of the initial plant at Bissett Creek is expected to commence in Q2 2023.
Tirupati Graphite
Tirupati Graphite PLC (LSE:TGR, OTCQX:TGRHF) is a fully integrated producer of high-grade natural flake graphite, speciality graphite and graphene. The Company is currently increasing its production levels targeting 84,000tpa of flake graphite by 2024 from its Sahamamy and Vatomina Mines, located in Madagascar.
The Sahamamy Mine currently has a JORC 2012 compliant mineral resource estimate of 7.1mt at a grade of 4.2% GC, while the Vatomina Mine currently has a JORC 2012 compliant mineral resource estimate of 18.4mt at a grade of 4.6% GC.
Tirupati is increasing its primary flake graphite production capacity in Madagascar from 12,000 tpa to 30,000 tpa by September 2022, which will make it one of the few significant producers of the critical mineral outside China.
Volt Resources
Volt Resources Ltd (ASX:VRC) has interests in two graphite projects, the first is a 70%-interest in the Zavalievsky Graphite business, located in Ukraine, and the second is a 100%-interest in the Bunyu Graphite Project, located in Tanzania.
At Zavalievsk, Volt is currently aiming to produce 8,000 to 9,000 tonnes of graphite product during the year ending 30 June 2023, following the successful re-start of operations.
Bunyu has a JORC 2012 compliant total resource estimate of 461mt at a grade of 4.9% GC.
Volt plans to develop the Bunyu Project in two stages to accelerate the timeline to production. A 2018 FS for stage one defined an operation producing 23,700tpa over a mine life of 7.1 years. The opex is expected to be US$664/t and the capex is US$31.8 million, giving the project a post-tax NPV10 of US$14.7 million and an IRR of 19.3%.
A definitive feasibility study (DFS) for stage two will be completed concurrently with the construction of Stage 1. The Stage 2 DFS will be based on the December 2016 Preliminary Feasibility Study (PFS), which defined an operation producing an average of 170,000 pa over the over a 22-year life of mine. Opex averages US$536/t of concentrate and a capex is US$173.0 million.
The 2016 PFS returned a post-tax NPV10 of US$890 million and a post-tax IRR of 66.5% assuming an average price of US$1,684/t for the graphite concentrate.
Developers
Sovereign Metals
Sovereign Metals Ltd (ASX:SVM, AIM:SVML) is advancing the Kasiya Rutile-Graphite Deposit, located in Malawi.
Kasiya is an unusual deposit in that it is an eluvial heavy mineral deposit that contains significant graphite. The Project has a JORC 2012 compliant mineral resource estimate of 1.8 billion tonnes at an average grade of 1.32% GC and 1.01% rutile.
Kasiya is expected to be developed in two phases. The first phase will produce 85,000 tonnes of flake graphite and 145,000 tonnes of rutile per annum and have a capex cost of US$372 million.
The second phase will increase production to 170,000 tonnes of flake graphite and 260,000 tonnes of rutile per annum, with an additional capex of US$311 million.
A scoping study (SS) completed in June 2022 returned a post-tax NPV8 of US$1.54 billion and a post-tax IRR or 36% over an initial 25-year mine life. The SS assumes a graphite average basket price of US$1,085/t and rutile price of US$1,308/t with an opex of US$320 per tonne of rutile and graphite product.
Sovereign Metals has already commenced work on the PFS, which is due for completion in early 2023. Results from the expansion and high-grade drilling programmes are anticipated in the second half of 2022.
Blencowe Resources
Blencowe Resources PLC (LSE:BRES) is advancing the Orom-Cross Graphite Project, located in Uganda. The Orom-Cross Project currently has a JORC 2012 compliant mineral resource estimate of 24.5mt at a grade of 6.0% GC.
A recently completed PFS at the project returned a post-tax NPV of US$482 million and a post-tax IRR of 49%, using an average graphite basket price of US$1,307/t over a 14-year mine life. The project has an opex of US$499/t and capex of US$62 million.
The project is expected to be developed in stages with a pilot plant operation anticipated to commence in H2 2023, producing 1,500 tpa to be followed by an initial start-up operation in 2025 producing 36,000 tpa; which increases to 50,000-100,000tpa by 2028 and 100,000-147,000 tpa by 2031. A DFS is expected to be completed at the project by the end of 2023.
Blackearth Minerals
Blackearth Minerals NL is advancing the Maniry Graphite Project, located in Southern Madagascar, with the Definitive Feasibility Study (DFS) expected in October 2022. The Project has a JORC 2012 compliant mineral resource estimate of 38.8 mt at a grade of 6.4% GC
An updated SS published in December 2021 defined a post-tax NPV10 of US$184.4 million and a pre-tax IRR of 86.1% assuming an average graphite price of US$1,258/t.
The project is expected to be developed in two stages, Stage one has a capex cost of US$38.3 million and will produce an average of 30,000tpa over four years. Stage two will have a capex cost of 26.3 million and will produce an average of 60,000tpa over 10 years. The project will have an average life of mine opex of US$447.76/t of concentrate.
Blackearth also owns a 50% interest in a joint venture with Metachem Manufacturing Company, a leading producer of expandable graphite and other downstream products, for the development of an expandable graphite plant, located in India.
The joint venture, known as Panthera Graphite Technologies, plans to commence development of the plant in September 2022, with completion targeted for early 2023 and first sales expected in Q2 2023.
The plant is expected to produce 2,000-2,500tpa of expandable graphite for the first 3 years. The joint venture then plans to increase production levels to 4,000-5,000tpa. The capex for stage 1 is scheduled to be US$3 million, with gross revenue projected to be US$7 million in the first full year of production, growing to US$18- US$20.5 million per annum in Stage 2.
Evolution Energy Minerals
Evolution Energy Minerals Ltd (ASX:EV1) is advancing the Chilalo Graphite Project, located in Tanzania. Chilalo has a total high-grade mineral resource estimate of 20mt at a grade of 9.9% GC and a low-grade mineral resource estimate of 47.3 mt at a grade of 3.5% GC.
A DFS published in January 2020 defined a post-tax NPV8 of US$323 million and a post-tax IRR of 34% assuming an average graphite price of US$1,534/t. The project is expected to have a capex cost of US$87.4 million and will produce an average of 50,000tpa over a mine life of 18 years.
An updated DFS and front-end engineering design (FEED) for Chilalo is currently underway. Evolution has also appointed Auramet International, to advise and secure project financing for Chilalo.
In addition to advancing Chilalo, Evolution is exploring downstream processing opportunities to produce traceable products for battery manufacturers.
With this in mind, it has commenced a commercial verification program in partnership with an established US manufacturer of battery graphite products to evaluate the amenability of Chilalo graphite fines to producing coated spherical graphite using thermal purification and proprietary coating technologies.
It has also signed an MOU with Yichang Xincheng Graphite Co Ltd, a leading global supplier of graphite foil, which is used in mobile phones, tablets and TV screens. The joint venture plans to assess the feasibility of constructing a downstream manufacturing facility in Europe, to produce expandable graphite, graphite foil and other high-value graphite products.
Mason Graphite
Mason Graphite Inc (TSX-V:LLG, OTCQX:MGPHF) is developing the Lac Guéret Project, in Québec, as part of a joint venture with Nouveau Monde Graphite (TSX-V:NOU) Inc. Lac Guéret has a measured and indicated resource of 65.4 mt at a grade of 17.2% GC, with an inferred resource estimate of 16.6 mt at a grade of 17.3% GC.
A feasibility study (FS) published in December 2018 outlined an operation producing an average of 51,900tpa over a mine life of 25 years with an opex that averages US$484/t of concentrate and a capex of C$258.2 million.
This results in a post-tax NPV8 of C$278 million and a post-tax IRR of 21.7% assuming an average price of US$1,465/t.
International Graphite
International Graphite Ltd (ASX:IG6) is developing the Springdale Graphite Project in Western Australia. Springdale has JORC 2012 compliant inferred resource estimate of 2.6mt at a grade of 17.5% GC, with a lower-grade zone of 13mt at a grade of 3.7% GC.
The Company is currently drilling 4,200 meters designed to convert the existing inferred resource to measured and indicated categories and an additional 3,000 meters to expand the existing resource base. International Graphite plans to announce the updated resource estimate in November 2022 and complete a PFS by April 2023 with a DFS to be completed by October 2023.
The Company also owns a downstream graphite pilot plant, at Collie, Western Australia. The first spherical graphite samples are expected to be produced from the pilot plant in August 2022, with an FS for commercial scale operation to be completed by December 2023.
Oar Resources
Oar Resources Ltd (ASX:OAR) is exploring the Oakdale Graphite Project in South Australia. The project has a JORC 2012 compliant mineral resource of 13.47 mt at a grade of 3.3% GC. A SS completed in December 2015 returned a post-tax NPV8 of A$170 million assuming an average price of A$1,220/t.
The SS defined average production of 94,500tpa over a mine life of three years with an opex that averages US$484/t of concentrate and a capex of A$48 million. Ore Resources is planning a 5,500-meter drill programme to expand the resources base, which remains open along strike and at depth.
The company is also planning to undertake a new metallurgical programme to assess the amenability of the graphite from the Oakdale Project to produce spherical graphite for use in lithium-ion batteries.