One of China’s biggest privately-owned graphite players has backed Battery Minerals’ plan to establish a graphite operation in Mozambique, progressing a memorandum of understanding to a formal offtake arrangement.
Qingdao Guangxing Electronic Materials Co will take 10,000 tonnes off graphite concentrate per year from Battery Minerals’ Montepuez mine in Mozambique, with the agreement covering at least the next three years.
The deal is the second binding offtake deal signed by Battery Minerals in recent weeks, following its 11,000tpa arrangement with US-based Urbix Resources, announced in December.
Battery Minerals chairman David Flanagan said the company had 40 per cent of its targeted production covered by sales agreements.
Mr Flanagan said first shipments of graphite concentrate should occur in the March quarter of 2019.
“The agreement shows Battery Minerals is rapidly emerging as a significant global graphite producer which will enjoy low capital and operating costs and strong cahsflows,” Mr Flanagan said.
“WE have tailored the Montepuez project so that it is extremely bankable, it generates a product which meets the needs of battery manufacturers, delivers extensive benefits to the local community and creates strong returns for shareholders.
“With two binding offtake agreements now signed, we are more confident than ever that we will achieve all these objectives.
Qingdao Guangzing Electronic Materials Co is based in Shandong and has a long history in graphite mining as well as the production of graphite concentrate.
The company produced more than 40,000 tonnes of graphite concentrate in 2017, supplying a wide network of anode producers globally.
Graphite is expected to be one of the hottest sectors of international mining in 2018 and beyond, with forecasts indicating global demand will exceed supply by 2020.
The material is one of the key ingredients in lithium-ion batteries, the rapid development of which is stimulating the global electric vehicle industry, particularly in China.