Evion has every reason to proceed with developing a battery anode material plant in Europe after its Scoping Study confirmed that it would generate strong returns.

While the growing adoption of electric vehicles and the accompanying need for more lithium-ion batteries would seem to make the need for more battery anode material – made from graphite – equally strong, the study provides the company with a foundation to realise value from its Maniry mine in Madagascar.

Under Evion Group’s (ASX:EVG) study into a plant that will process graphite concentrate from Maniry into uncoated spheronised purified graphite for use in batteries, five different process routes and two throughput rates were reviewed as a precursor to a Pre-Feasibility Study.

At a throughput of 30,000 tonnes per annum, the study found that the plant would generate pre-tax net present value (NPV) and internal rate of return (IRR) – both measures of a project’s profitability – of US$392m ($563m) and 39.5% respectively as well as pre-tax cashflow of US$2.8bn from an initial capital expenditure of US$117m.

Under this scenario, payback will be achieved in 3.51 years.

Halving the throughput to 15,000tpa will reduce the initial Capex to US$74m but also reduce NPV to US$152m, IRR to 28.4% and cashflow to $1.4bn while increasing the payback period to 4.67 years.

These figures are all inclusive of a 30% contingency which is typical of a Scoping Study’s role as a low level technical and economic assessment.

“Underpinned by out Maniry graphite project, this battery anode material plant has the potential to uniquely position Evion to capitalise on the strong growth in demand for non-Chinese supplies of uncoated-SPG from the European lithium-ion battery market,” managing director Tom Revy said.

“By developing a vertically-integrated graphite business, Evion is positioning itself to take full advantage of the highly favourable supply-demand fundamentals emerging for our products as a result of the energy transition.

“Evion continues to grow its development pipeline, which includes expandable graphite, uncoated spheronised purified graphite and the Maniry graphite project, in a controlled and strategic manner to provide shareholders more direct exposure to the fast-growing global graphite supply chain.”

Graphite demand and Scoping Study

While production of spheronised purified graphite used in the production of lithium ion batteries continues to be dominated by China and will likely continue to do so in the medium term, the emerging supply deficit and growing interest in supply chain security provides an enormous opportunity to supply material into European markets.

As such, the company engaged Wave International in September 2022 to oversee the Scoping Study, which assessed the viability of building a BAM plant in Germany.

This included the development of a high-level flowsheet, incorporated mechanical shaping followed by shaping and reviewed five purification options based on earlier battery testwork data, which achieved up to 99.99% fixed carbon.

Next steps

Evion will now carry out comprehensive testwork on Maniry concentrate to better define the process flow sheet, optimise reagent selection and understand the characterisation of the waste stream.

It will also progress site selection studies for the finalisation of the location of the plant and investigate further infrastructure options based on site requirements.

Other work includes producing specification/datasheet for product produced from the purification flowsheet and starting marketing activities.

 

 

 

This article was developed in collaboration with Evion, 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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