Madagascar-focused flake graphite miner Tirupati Graphite has received $1-million net of prepayments from existing clients to support the ramp-up of its operations in Madagascar.

The company is ramping up the Vatomina and Sahamamy flake graphite projects to installed capacity of 30 000 t/y, following which it plans to increase capacity further to 84 000 t/y as per a medium-term development plan.

Executive chairperson Shishir Poddar explains that, since Tirupati completed the expansion of its two projects to the 30 000 t/y capacity mark, it has been advancing discussions with multiple new customers and closed deals with certain existing clients in the US and Europe.

He says the prepayments will significantly support Tirupati’s working capital requirements and provide suppliers and customers with confidence, while allowing the company to maintain a strong pipeline of business.

Tirupati has, to date, preferred to meet its working capital needs for ramping up of operations through non-dilutive arrangements.

The orders for which the upfront prepayments were received are to be shipped over a six-month period. These orders represent about 15% of the quantum of sales Tirupati expects to make over this six-month period.

The company offered a discount of between 7% and 15% to the price in return for the prepayment arrangement, which also reflected the recent softening in the market price for flake graphite.

Poddar points out that the company has sufficient finished product inventory required to ensure it satisfies customer requirements in a timely manner, and also to allow the company to take the benefits of the spot market and further business development purposes as it ramps up production.