Graphite for Lithium-Ion Batteries
EcoGraf Ltd., ASX: ERG, [website], headquartered in Perth, Western Australia and an office in Germany, has developed a patented process to produce Spherical Purified Graphite (SPG), the key ingredient for the anode of a lithium-ion battery.
The company spent three years and many millions of dollars in R&D perfecting its eco-friendly purification, process design, feasibility studies, piloting, product testing and endorsement by anode manufacturers; and more recently on engineering and design for a processing facility in Western Australia.
Over US$25 million has been invested to date to create two highly attractive development ready graphite businesses.
A lot is heard about cathode minerals -- lithium, cobalt, nickel and manganese -- which together make up the composition of the cathode in a lithium-ion battery. What is not fully understood is the anode which is 100% graphite and represents almost half of the total minerals in a lithium-ion battery.
What's required is not just any graphite, but a plus 99.95% pure spherical graphite product that is refined to meet stringent chemical and physical specifications capable of withstanding the intense operating conditions of a battery in an electric vehicle.
Demand for this specialised product is growing exponentially. Once established, EcoGraf will operate a diversified graphite portfolio supplying established markets in Asia, Europe and the U.S..
Its process is:
- lower cost than (Chinese)* production due to higher recovery to SPG from graphite and removal of hydro‐fluoric acid; and
- environmentally friendlier than current production; it does not use HF acid, which is used in all current production.
* Currently, all battery anode material is produced in China
The company has been operating a pilot plant for over two years now. More than 80 samples have been sent to various potential purchasers demonstrating process quality and control. They have varied with the specifications required by differing manufacturers. The process has been shown to work on a range of graphites.
Stage 1 of the Kwinana plant will be producing in 2021. The Definitive Feasibility Study (DFS) determined a project capital cost of US$22.8 million to produce 5,000 tons per year of SPG at a cost of about U$2,500 per ton and sell for about US$4,000 per ton on average and up to $4,400 per ton for SPG10. Further 5,000 tons per year trains can be added when required, with each extra train having an extra capital cost of US$16.4 million.
Strong and Growing Demand
Based on analysis by Benchmark Minerals Intelligence [Link] involving plans for mega‐factories to produce lithium ion batteries, demand for SPG is expected to rise from about 290 kilo tons in 2020 to over 1 million tons by 2028.
In August 2015, the company announced the results of a scoping study into the production of battery anode material as a downstream development of its Epanko graphite mining project. This was followed by announcements of:
- the results of a successful Feasibility Study on September 27th, 2016;
- an optimisation study, on August 3rd, 2018, showing that the EcoGraf process could be successfully applied to a variety of graphitic concentrates, not just Epanko; and
- the grant of a patent on December 8th, 2018, on the EcoGraf process.
On September 5th, 2019, the company announced the results of an updated detailed engineering study of a plant sited at Kwinana, carried out as part of the due diligence of the prospective debt financiers. The results of that study included:
- capital of US$22.8 million for stage 1 to produce 5,000 tons per year of SPG, all of which will be SPG 10 and SPG 15; and
- a further US$49.2 million to expand this plant by 15,000 tons per year to 20,000 tons per year.
To complement battery graphite operations the company is also developing the TanzGraphite natural flake graphite business commencing with the Epanko Graphite Project in Tanzania, Africa, which will supply additional feedstock for the spherical graphite processing facilities and provide customers with a long term supply of high quality graphite products for industrial applications such as refractories, recarburisers and lubricants.
Key milestones achieved to date include:
- Bankable Feasibility Study ("BFS") completed by GR Engineering [Link];
- bank appointed Independent Engineer's Review completed by SRK Consulting (UK) [Link], confirming that the BFS adequately addresses all technical aspects of the proposed development and the social and environmental planning aspects satisfy IFC Performance Standards [Link] and World Bank Group Environmental, Health and Safety Guidelines [Link];
- off-take commitments for the planned production secured in Asia (Sojitz Corporation) and Europe (thyssenkrupp and a large European graphite trading group);
- Resettlement Action Plan approved by the Tanzanian Government;
- mining licence granted; and
- Letter of Intent with GR Engineering for early works program and EPC construction contract
The project in addition to generating a pre-tax NPV10 of US$211 million for shareholders will make a long-term, trans-generational contribution to economic, industrial and social development within Tanzania. It is expected to operate for over 40 years.
AGM Nov 29th, '19 with TANZ Graphite (22 pgs.) Link
Dec '19 Quarterly Report (13 pgs.) Link
Power Point Presentation Feb 1st, '20 (18 pgs.) Link
Research Report by GCPP's Sydney Au Colleague Feb 10th, '20 (20 pgs.) Link