13/11/2017 - 16:00

Optimism drives graphite raisings surge

13/11/2017 - 16:00

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SPECIAL REPORT: Activity in Western Australia’s graphite sector is continuing apace, with local hopefuls seeking to raise more than $70 million this quarter, an amount similar to that raised for the entire financial year just past.

A sample from BlackEarth Minerals' project in Madagascar. Photo: BEM

Activity in Western Australia’s graphite sector is continuing apace, with local hopefuls seeking to raise more than $70 million this quarter, an amount similar to that raised for the entire financial year just past.

The money moves come as final preparations are made at the state’s first commercial graphene facility, which is scheduled to open in Henderson at the end of the month.

Four raisings have been announced or completed in November, with the $6 million spin-off of Lithium Australia’s graphite assets into BlackEarth Minerals getting into gear earlier this month when shareholders were given a priority share offer.

Triton Minerals, which hopes to soon complete a definitive feasibility study into the Ancuabe graphite project in Mozambique, announced it would seek to raise $6 million through an entitlement issue (see table).

If it is successful, it would bring Triton’s raisings to $7.2 million since a $14 million recapitalisation in July last year.

Speaking to a recent conference on graphite, Triton managing director Peter Canterbury highlighted the major trends the company anticipates should support the graphite market moving forward.

One factor is environmental concerns in China, which have contributed to the country’s plan to lift the number of electric vehicles on its roads to 5 million by 2020.

A number of major car manufacturers have formed consortiums to enter the electric vehicle market, according to Triton.

Another outcome of the trend towards environmental protection in China is that the country may be unlikely to continue to supply global markets at the same level as it becomes more discerning about its industry.

South Korea was also doing its bit to underpin the market, with the country’s flake graphite imports from China growing 66 per cent in recent years, according to Triton.

Volt Resources, which intends to secure $38.9 million from a bond raising launched in October, was also bullish.

Volt estimates flake graphite concentrate demand to nearly double in the next three years from its current level, while production from China would fall almost 40 per cent.

Those factors are already having an impact, with prices for at least one flake size increasing around 50 per cent in the past nine months, to have reached around $US1,800 in September.

Other companies picking up cash in recent months include: Battery Minerals, which raised $2 million; Bass Metals, which secured $5.4 million in equity and $2 million via convertible notes; and Graphex, which secured $2.7 million of equity.

Bass Metals has an ambitious growth plan at its Graphmada project in Madagascar, with a planned increase of production from 1,500 tonnes per annum to  20,000tpa by 2019.

Processing

Locally, Nedlands-based First Graphite is planning to open what it says will be the nation’s largest commercial graphene facility in Henderson later this month.

That facility will be focused on producing graphene for building materials, fire retardants and conductive polymers markets.

First Graphite executive director Peter Youd said while those sectors were quite separate from the battery market, demand for graphene in fire retardants and conductive polymers was growing strongly.

Graphene had an advantage as a fire retardant because it did not produce toxic fumes, while as a polymer it could replace wood in items like shipping pallets, increasing lifespan.

Mr Youd said the company had chosen to produce in Australia because First Graphite’s manufacturing process was simple and had limited labour costs, while the company could protect its intellectual property.

First Graphite is working on research projects with three Australian universities, he said.

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