BlackEarth is closing in on finalising a binding joint venture agreement with Metachem for the development of a downstream graphite processing plant.

The company had signed the initial memorandum of understanding with the Indian producer of expandable graphite and other downstream products back in late June this year.

This experience is significant as demand for expandable graphite is expected to be high due to projected worldwide supply shortages.

BlackEarth Minerals (ASX:BEM) notes that following numerous meetings over the past two to three months, all material terms to the binding JV agreements are now approaching final sign-off after the incorporation of a JV company now expected to occur in the short term.

It added that several potential development sites located within Special Economic Zones in India, which can offer significant tax, power and other economic concessions to developers, have been selected with a final decision on the preferred site imminent.

Work has also been carried out in preparation of a Stage 1 plant development plan.

“We have undertaken an enormous amount of work with our colleagues at Metachem in progressing this exciting development for the company,” managing director Tom Revy said.

“Apart from progressing toward agreement on the terms of binding JV agreements, we have been active in developing a plan for production, assessing proposed sites that offer economically attractive solutions and also assessing proposed supply arrangements with our marketing and supply partners in Europe.

“This is potentially a very significant development in the growth of our company and we’ve undertaken a lot of work toward concluding binding JV agreements that suit our strategic short and long term business goals.

“We believe the terms that should be concluded offer a very attractive outcome and we look forward to updating the market with the full details of this in the short term.”

Expandable graphite agreement

Under the original non-binding MoU, the two companies had agreed to reach terms on an equal JV to produce expandable graphite.

This will have initial production of 2,000 tonnes per annum with potential to double this along with the development of other plants in Europe and other strategic locations.

BlackEarth and its sales and marketing partner LuxCarbon will be responsible for sourcing high quality graphite concentrate for the plant.

Once its own processing plant at Mainry is completed, the company will then provide large and jumbo flake graphite to the JV.

 

 

 

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.

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