Australian graphite mining company Black Rock Mining [ASX:BKT] rose more than 20% on Friday after announcing an agreement with US cleantech firm Urbix.
BKT signed a conditional framework agreement with Urbix for material from BKT’s Mahenge Graphite Project.
Despite the big jump today, the graphite stock is down 25% year to date.
Source: www.tradingview.com
BKT teams up with Urbix for graphite processing
With its project based in Tanzania, Black Rock Mining trades with a current market cap of around $170 million.
On Friday, BKT signed a framework agreement with the US cleantech graphite processing company Urbix.
What exactly does this agreement entail?
Urbix will offtake a minimum of Mahenge ‘Module 2’ — 100 mesh graphite 95% concentrate, with the following agreed volumes:
- ‘Year 1: 7,500 dry metric tonnes (dmt)+/- 10%
- Year 2: 10,000 dmt+/- 10%
- Remaining Term: 15,000 dmt+/- 10%’
Black Rock expects to produce 30,000 dmt of graphite every year after the initial ramp-up period has passed.
Working with Urbix will mean that BKT could fast-track its ‘Module 2’ construction with Urbix able to foot a large part of the bill, either as a prepayment or equity support in its graphite off-taking.
However, doubling the project’s size will still mean a substantial pool of debt for BKT.
Nevertheless, BKT says Urbrix will provide many benefits to the company’s plans, delivering ‘best of breed’ anode products and harnessing the supply chain by:
- ‘Materially lower energy consumption
- Elimination of hydrofluoric acid use
- Significantly higher product yield (more than double the industry standard)
- Ability to incorporate at the particle level appropriate levels of synthetic graphite material to produce a blended anode material as a drop-in product for cell manufacturers
- Extensive third-party assessment confirming Urbix’s anode material has superior electrochemical performance.’
BKT and the influx of graphite
BKT pointed out that graphite, just like lithium (possibly the most widely known EV (electric vehicle) battery material due to its dizzying success in 2021), has also gained critical mineral status — especially in the US where government support is surging.
BKT said it expects more than eight battery gigafactories to be constructed in the US by 2025, with annual demand to reach USD $2.3 billion.
CEO, John de Vries, stated:
‘Signing this Agreement with Urbix is potentially transformational in the context that we are developing an additional USA and European option for the processing of Black Rock’s graphite into battery applications.
‘Urbix’s technology will deliver significant environmental and economic benefits deploying our ESG footprint across the whole battery anode supply chain, further differentiating our offering from competing brands.
‘Being in a position to supply increased volumes of large flake is particularly beneficial in securing market share with Mahenge branded product in a market that is increasingly short of large flake.
‘“Urbix has analysed over 35 different graphite resource samples to assess suitability for battery materials,” added Urbix CEO, Nico Cuevas.
‘“Urbix has technically confirmed that the Black Rock graphite resource is of a quality perfectly suited to EV battery supply chains and it is excited to establish these initial steps toward a collaboration with Black Rock and its customers.”’
The EV market is rapidly expanding, boosted further by government initiatives and funding programs supporting production across the globe.
But our energy expert, Selva Freigedo, thinks the global transition to EVs means the industry faces a supply crunch, which can send prices for battery materials soaring even higher in 2022 and beyond.
If you’d like to know more, check out Selva’s ‘Three Ways to Play the Great EV Battery Race’ report.
Regards,
Kiryll Prakapenka,
For Money Morning
