Kristie Batten: Exploring Australia's missing battery link

One of Australia’s top mining journalists, Kristie Batten writes for Stockhead every week in her regular column placing a watchful eye on the movers and shakers of the small cap resources scene.

Why is it that Australia produces all the minerals needed to make a lithium-ion battery except for graphite?

Australia is the world’s biggest lithium producer but produces no graphite, despite having a handful of advanced projects.

One of those development hopefuls is Kingsland Minerals (ASX:KNG). Managing director Richard Maddocks told Stockhead that it wasn’t just Australia struggling to establish a graphite sector.

“It’s to do with the concentration of graphite production and downstream processing in China,” he said.

“That just adds an extra challenge to anyone outside of China getting a project going.”

China is forecast to account for more than 70% of natural graphite production this year, according to Benchmark Mineral Intelligence.

China introduced export controls on graphite late last year, further highlighting the need for supply from outside China.

While prices have been weak – much like lithium – demand is increasing.

All lithium-ion batteries, regardless of chemistry, contain 50-100kg of graphite in the anode.

According to Adamus Intelligence, a record 631,821 tonnes of graphite were deployed onto roads in electrified passenger vehicles sold in 2023, up 41% over 2022.

Sales of electric vehicles have continued to increase this year and Benchmark forecasts the battery market to account for 80% of graphite demand by 2030, up from around 55% currently.

“I think you will find that as China probably can’t meet that demand, even with synthetic graphite coming into the mix, that the price will go up, and that’ll obviously increase the impetus for the downstream consumers to diversify away from China,” Maddocks said.

Leliyn jumps to the front of the queue

Kingsland listed on the ASX in 2022, primarily as a uranium explorer.

The company was aware its Allamber uranium project in the Northern Territory was prospective for graphite and in February 2023, announced a discovery at the Leliyn project.

Leliyn now has an inferred resource of 194.6 million tonnes grading 7.3% total graphite content (TGC) for 14.2Mt of contained graphite.

It makes the deposit, which is expected to grow further, the largest in Australia, ahead of Renascor Resources’ Siviour in South Australia, and the ninth largest graphite deposit globally.

Kingsland has an exploration target for Leliyn of 700Mt to 1.1 billion tonnes at 7-8% TGC for 50-90Mt of contained graphite.

If the top end of the target is realised, it would make Leliyn second in size globally to Syrah Resources’ Balama operation in Mozambique.

Maddocks said while early stage, Leliyn had a lot going for it, particularly being just 250km from Darwin port.

He believes the large deposit and proximity to the port will allow Leliyn to compete with China on costs.

The discovery is already attracting interest from potential customers.

“We’ve had some interest from people and some discussions regarding offtake and downstream processing and things like that,” Maddocks said.

“So there is an appetite there to diversify away from China, and especially given our location – we’re close to markets in South East Asia like South Korea and Japan – I think people are looking at us.”

Kingsland has just submitted 150kg of diamond core sample to a laboratory in Perth, which will be used to produce a concentrate to be sent to another lab, likely in Germany.

“They’ll assess the viability for the downstream processing into spherical graphite and purified spherical graphite and the like,” Maddocks said, adding that the results would not be received until early next year.

“In the meantime, we’ll do some more drilling in the next month or two, and that’ll upgrade part of the resource into indicated, and that’ll probably give us the resource base to start doing some, initially internal, scoping studies.”

The work is expected to feed into more formal scoping studies next year.

At Stockhead, we tell it like it is. While Kingsland Minerals is an advertiser at the time of writing, it did not sponsor this article.