MRC to increase stake in Munglinup flake graphite project to 90%

CBC Metal Time:Jan 09, 2020 11:35 Source:Fastmarkets

Mineral Commodities will increase its investment in the Australian graphite sector as part of the company’s strategy to enlarge its role in the anode battery production chain.

Australian producer Mineral Commodities (MRC) will ramp up its share in the Munglinup graphite project in the southern part of Western Australia to 90% from 51%, in response to a positive conclusion in a definitive feasibility study (DFS), the company said on January 8, 2020.

This was the second phase in a planned three-phase joint venture in which the Australia-listed company will acquire a 100% interest in the project from Gold Terrace Pty Ltd.

The environmental permitting process to develop the project is scheduled for completion in the third quarter of 2020.

The DFS reported that the average production of graphite concentrate would be 52,000 tonnes per year for the anticipated 14 years lifetime of the mine.

Material from the project will have an average concentrate grade of less than 95%, with 38.8% of the flake size defined as "fine" and 29.8% defined as "small".

The Australia-listed company reported an expected operating cost of $491 per tonne on an fob Fremantle basis.

Fastmarkets assessed the price of graphite flake, 94% C, -100 mesh, fob China, at $540 per tonne on January 2.

"The DFS further enhances the company’s ambitions to build a global, vertically integrated carbon business based on two global strategic operating production centers in Tier 1 jurisdictions, Australia and Norway, producing sustainable natural graphite concentrate as a crucial raw material for the production of precursor and active anode materials," executive chairman Mark Caruso said.

In October 2019, MRC fully acquired Skaland Graphite in Norway.

MRC will investigate the production of battery anode material from material from Skaland with Norway-based battery cell developer Freyr, the companies both said in December.

They will work together with the intention that MRC will supply Freyr’s demand for feedstock.

Freyr has committed to buying material from MRC. The Norwegian company is developing a combined 2+32GWh lithium-ion battery facility and a 600MW onshore wind-park in its home country.

The two companies will work toward MRC investing in Freyr’s battery production.

In June 2019, Freyr won support for the building of a battery cell gigafactory in Norway.

On December 23, Caruso said: "The opportunity to partner with Freyr, a Norway-based company planning to build one of Europe’s first battery gigafactories in the fastest adoptive global electric vehicle battery market, Norway, is a logical next step in MRC’s world-class Skaland graphite mine acquisition objectives, which include a vertically downstream integrated battery business development strategy."

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