Archer Exploration (ASX:AXE) is a step closer to supplying the lucrative lithium-ion battery market after proving it can turn graphite from its Campoona deposit into a product that can be used in the anode.

The company revealed today that it can produce spherical graphite – a key component of the anode, which without it the battery would not work.

Batteries include an anode (positive) and a cathode (negative) and the electrical current flows between the two.

To produce spherical graphite, flake graphite has to be shaped into a rounded, spherical shape.

Archer already proved back in August last year that its graphite was suitable for use in lithium-ion batteries.

And small-scale mechanical mill processing of Archer’s Campoona graphite has now successfully converted 95 per cent and +99 per cent total carbon content flake products into spherical graphite.

According to independent market researcher IDTechEx, the market for lithium-ion cells is forecast to reach $US130 billion ($183.9 billion) by 2028.

This is thanks in large part to the rapid rise of electric vehicles, which IDTechEx says will be a $US730 billion market by 2027.

The battery market for EVs alone is predicted to hit $US125 billion by 2028.

Here’s what spherical graphite looks like through a microscope:

Microscopic image of spherical graphite, Archer Exploration
Source: Archer Exploration.

Spherical graphite products can fetch between $US3400 and $US4400 per tonne, making it a high-value product.

By comparison, straight large flake graphite can sell for around $US1200 per tonne.

“This was a critical milestone that was achieved, and by doing so, we have overcome a high barrier to entry to the lithium-ion battery market, CEO Mohammad Choucair said.

“We still have the question of yield, which determines product viability, however this is a matter of scale and process optimisation.

“Intrinsically, our material is of excellent quality, and suitable for processing into high-value anode materials.”

Archer says it will continue to pursue partnerships with lithium-ion battery manufacturers to scale and integrate Campoona graphite further downstream in the supply chain.

The company plans to test purification of the post-processed materials and their suitability for integration in full- and half-cell lithium-ion batteries.

This will pave the way for assessment of Archer’s product by potential off-take partners and end users.

Mr Choucair told Stockhead Archer was not “that far away” from sending samples to potential off-take partners and end users, and it would most likely be before the end of the year.

“It’s a matter of screening the right companies and the right people within these organisations,” he said.

“I think that’s our rate limiting step. We’re well and truly on the way to doing that now.”

Shares edged up 1.4 per cent to 7.1c on Tuesday morning.

Archer Exploration (ASX:AXE) shares over the past year.
Archer Exploration (ASX:AXE) shares over the past year.

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