BlackEarth hits the go button on graphite with new development site in India

BlackEarth has acquired a 5-acre development site in India’s Pune region with JV partners Metachem, fast-tracking plans to produce 2,000–2,500tpa of expandable graphite before increasing production capacity to 4,000–5,000tpa.

Site development will kick off in September ahead of completion in early 2023 with trial processing to be undertaken immediately thereafter.

At this stage, the company is aiming to supply expandable graphite in the second quarter of 2023, having already secured a binding offtake agreement to supply all initial production to global graphite downstream processing leaders, Grafitbergbau.

The cost of site development, including land, building and all CAPEX is US$3m (stage 1) with gross revenue projected to be US$7m in the first full year of production, growing to US$18- US$20.5m pa once plant expansion takes place.

In parallel, BlackEarth (ASX:BEM) executives have completed a feasibility study to assess commercial terms and all other factors relevant to the JV – now known as Panthera Graphite Technologies – as a final investment decision wraps up.

Experience in the graphite game

Metachem has been producing expandable graphite and supplying products into the worldwide market for several decades.

They boast a strong business model, one that provides a degree of commercial security to the JV, while BlackEarth’s team is set to manage the marketing and sales of product produced, utilising their strong logistics and global marketing network.

Along with lithium-ion batteries, expandable graphite is one of the fastest growing markets – in fact, it is the only graphite market to have experienced price increases over the last couple years and is mainly based on jumbo and large-flake material.

Highlights of the JV terms

The JV operation will be established in a Special Economic Zone (SEZ) in India, a technology and chemical production area well-regarded for its decade spanning graphite production.

At the start, BEM said graphite concentrate will be sourced from external parties for about two years of operations before product from Maniry – the company’s flagship graphite project in Madagascar, Africa – starts supplying operations from around the three-year mark onwards.

Revenue and pricing assumptions are based on conservative price projections and up to 25% lower than other market participants.

This article was developed in collaboration with BlackEarth Minerals, a Stockhead advertiser at the time of publishing.

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.