Low-cost, quality graphite another boost to Sovereign’s Kasiya project

Sovereign’s Kasiya rutile project in Malawi has received an economic boost after analysis found that its flake graphite co-product could be produced at the lowest end of the cost curve.

With a world-leading contained graphite resource of 23Mt, this gives the project the potential to take a commanding position in the market for high-purity, coarse flake graphite that is suitable for use in lithium-ion batteries and other more traditional applications.

Sovereign Metals (ASX:SVM) could also benefit from a high graphite basket price as Kasiya’s graphite flake size distribution compares favourably with its industry peers.

To top it off, production of the project’s high quality natural graphite concentrate is expected to produce just 0.2t of carbon dioxide equivalent per tonne of graphite – about five times less greenhouse gas emissions compared to natural graphite produced in China’s Heilongjiang Province.

With Kasiya also hosting the world’s largest rutile resource at 18 billion tonnes grading 1.01% rutile, or 18Mt of the valuable titanium dioxide feedstock, the finding highlights its economic potential ahead of the imminent update to the 2021 Scoping Study.

“Not only is Kasiya the world’s largest rutile deposit and one of the largest flake-graphite resources, but our latest graphite industry benchmarking also demonstrates the potential for Kasiya to be a globally dominant supplier and low-cost flake graphite producer at scale,” managing director Dr Julian Stephens said.

“Importantly, the very low graphite production costs at Kasiya should allow Sovereign to compete aggressively on price point across global graphite markets.”

Low cost graphite

The benchmarking exercise comparing the co-product production cost of graphite from Kasiya based on the December 2021 Scoping Study results to peer flake graphite projects.

This found that Kasiya has an average life-of-mine Free on Board (FOB) operating cost of US$352 per tonne of both rutile and graphite produced.

If flake graphite production is considered incremental to primary rutile production then the operating cost is US$155/t of graphite produced.

This compares favourably to company’s such as Syrah Resources (ASX:SYR), which had FOB operating costs of US$464/t during the first quarter of this year.

Sovereign attributes the low cost of production to the production of graphite as a co-product, the soft, friable saprolite-hosted mineralisation that can be mined from surface using low-cost hydro-mining methods compared to its hard rock peers, and the project’s location just 40km from Lilongwe, the capital of Malawi.

Initial graphite metallurgical testwork has also demonstrated the potential to produce a coarse-flake and high-purity natural graphite product at 96% total graphitic content.

This product has a favourable flake-size distribution with over 60% in the more valuable large to super-jumbo fractions and demonstrates premium chemical characteristics and high crystallinity that make it suitable for use in lithium-ion batteries.

Sovereign has commenced a comprehensive bulk scale metallurgy and downstream test work program to build on these initial results and confirm the commercial potential of the graphite by-product from Kasiya.

This article was developed in collaboration with Sovereign Metals, 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.