Battery graphite company Renascor Resources nets supply deal with one of Asia’s largest traders
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Battery anode company Renascor Resources (ASX:RNU) has signed a supply deal for its spherical graphite product with one of Asia’s largest battery chemicals trading companies.
Japan-based Hanwa has initiated an offtake deal with Renascor Resources under a non-binding memorandum of understanding between the two companies.
“Our memorandum of understanding with Hanwa is a further significant step toward Renascor constructing, in Australia, the first integrated, in-country mine and purified spherical graphite (PSG) operation outside of China,” managing director, David Christensen, said.
The off-take deal is for the purchase of 10,000 tonnes per year of purified spherical graphite over a term of 10 years, with the annual delivery amounts yet to be decided.
The deal with Hanwa represents about one-third of Renascor’s projected production from its planned battery anode material operation in South Australia of 28,000 tonnes per year.
To date, Renascor Resources has received commitments for 100 per cent of stage one production from its Siviour plant after executing off-take deals with two Asian anode companies.
They are Shanxi Minguang New Material Technology Company and Jiangxi Zhengtuo New Energy Technology Company.
Both companies have rapidly advanced through initial production processes and will start more advanced product testing of bulk samples of PSG product.
The Siviour project is a vertically-integrated battery anode material manufacturing plant located on South Australia’s Eyre Peninsula, and the company is also building a PSG manufacturing plant in Port Adelaide.
The company’s Siviour graphite deposit in South Australia is one of the world’s largest outside Africa with 3.8 million tonnes of reserves and will be developed using an environmentally-friendly hydrofluoric acid-free purification process.
Renascor Resources is currently in talks with several more potential customers for offtake deals for its PSG product that include anode and battery companies.
The talks are to secure additional offtake agreements to allow the company to expand production capacity at its Siviour plant in a stage two expansion.
“As a result of an increase in inbound enquiries from globally-recognised anode and battery companies for Siviour PSG, we are now considering an expanded stage one production capacity or an additional stage two PSG production capacity,” said Christensen.
The spectacular growth in EVs and lithium-ion battery markets has spurred incredible demand for battery anode products such as PSG from anode manufacturers.
PSG product demand is expected to grow at a rate of 29 per cent annually this decade through to 2030, marking an increase to 2.4 million tonnes from a current volume of 200,000 tonnes.
Hanwa is one of Asia’s largest traders in battery chemicals and has a market value of ¥140bn ($1.7bn) and recorded sales of ¥1,700bn ($21bn) in the 2020 financial year.
“We are particularly pleased to be working with Hanwa, a leading Japanese global trading company, providing access to the Japanese anode market, which is the largest market for PSG outside of China,” said Christensen.
The Japanese trader has a long tradition of trading with some of the world’s largest metal and chemical producers and operated a dedicated Battery Team for the supply of graphite.
Renascor Resources will hold further talks with Hanwa in relation to price, product quality and other aspects for the supply deal following product validation tests.
Approximately 85 per cent of global lithium-ion battery anode production is currently based in China, and the remaining 15 per cent is located in South Korea and Japan.
Meanwhile, another battery materials company Galaxy Resources (ASX:GXY), has announced the result of test work to develop a simplified flow-sheet for its Sal de Vida project.
Previous test work undertaken by the Australian Nuclear Science and Technology Organisation at its facility in Sydney showed lithium carbonate quality from Galaxy Resources’ project in Argentina is approaching battery grade specification.
“Successful production of battery grade increases Galaxy’s revenue generating potential and widens the customer base. Off-take discussions will now be advanced with interested customers,” chief executive, Simon Hay, said.
“The lithium market is rebounding after a three-year period of decline and Galaxy Resources is well positioned to reap the benefits of recovering prices,” said stockbroker Argonaut in a note.
Another graphite anode company, Mineral Commodities (ASX:MRC), has recently finished a pre-feasibility study on its plan to build an active anode materials plant in Norway.
The company’s Skaland graphite project in Norway has one of the world’s highest grades of the material at around 30 per cent carbon with a resource of 1.78 million tonnes.
Mineral Commodities’ new plant in Norway will produce natural graphite anode material for lithium-ion batteries using an environmentally-friendly and low emissions production process; either a caustic roast process or a carbochlorination process.
Neither process uses hydrofluoric acid (HF) and the plant will have an initial capacity of 10,000 tonnes per year starting in mid-2022.