The outlook for ASX graphite stocks is very positive.

While graphite consumption has historically been driven by the steel market, rapid growth in EV production is expected to drive a big uptick in demand and pricing over the next few years.

Each EV requires ~55kg of flake graphite to make the battery anode.

If we hit predictions of 40m EVs manufactured per year by 2030 that’s ~2.2Mt of extra demand per year.

That’s means on top of the ~70 mines currently operating globally we need another 97, 56,000tpa natural flake graphite mines by 2035, Benchmark Mineral Intelligence says.

That’s right, 97. Sounds unlikely, doesn’t it?

It puts those juniors, with established resources and a clear plan to enter production in the next eight years, in a very strong position. Many of whom plan to go all the way down the value chain to make more cash.

Here’s a quick lesson on graphite jargon, because the process from graphite mine to battery is a fairly complex one.

Graphite ore is initially processed into a flake concentrate, which is then shaped in a process called ‘spheronisation’.

This is then purified to 99.95 per cent. At that point we have a tiny potato shaped particle, sized to a certain diameter, which is +99.95 per cent graphitic carbon.

Then these particles must be coated. Once coated, spherical purified graphite is called ‘active anode material’.

Now it is ready for sale to a cell maker.

Stockhead rang a whole bunch of ASX graphite stocks and asked – what makes your company a good investment?

11 got back to us by deadline. This is what they said.

 

SYRAH RESOURCES (ASX:SYR)

Market Cap: $1.26 billion

“Syrah is the only operating vertically integrated natural graphite active anode material (AAM) supplier outside of China with upstream and downstream expansion potential underpinned by the world-class Balama resource.

“Balama is a 350ktpa graphite producer in Mozambique supplying global battery anode and industrial customers since 2017.

“Vidalia is building an 11.25ktpa AAM facility in the US with commercial sales arrangements in place with tier 1 customers.

“In July, Syrah received a US$102 million ($146 million) binding loan from US Department of Energy (“DOE”) to expand Vidalia to a 11.25ktpa AAM production capacity.

Syrah managing director and CEO Shaun Verner said at the time: “The finalisation of a binding loan with the DOE under the ATVM program highlights Vidalia’s strategic position in the USA. It provides strong validation of Syrah, Vidalia and the Vidalia Initial Expansion. Importantly, the loan will allow Syrah to accelerate its growth strategy in its downstream business and support the rapidly growing EV and battery supply chain in the USA.”

 

VOLT RESOURCES (ASX:VRC)

Market Cap: $87 million

“Volt has a unique integrated supply chain strategy using its existing graphite production from its world class operating graphite mine in Europe and future graphite mine production from Africa to supply Battery Anode Material or Coated Spherical Purified Graphite material to the key lithium-ion cell manufacturing and EV markets of Europe and the USA – respectively the number 1 and 3 EV markets globally.

“Volt and our technology partner, American Energy Technology Co., are currently producing battery anode material for customer sample testing in the United States and Europe using graphite produced from the Zavalievsky mine with plans to get into small scale production in the US in the near future.

“Volt is able to provide an efficient, low cost and low carbon emissions graphite supply chain from mine to end users in Europe and the US with integrated management of ESG.

“The opportunity for Volt to be a future large-scale producer of high value battery anode products achieving pricing of US$8,000 per tonne and above using our existing graphite production is a key value driver for shareholders.”

 

BLACK ROCK MINING (ASX:BKT)­­­

Market Cap: $200 million

“Black Rock has a Tier 1 scale high-grade graphite project in Tanzania hosting the second largest reserve globally.

“We are the only graphite player on the ASX that has qualified a path to market with a commercial downstream customer in POSCO of Korea who is a cornerstone investor and customer.

“Black Rock has recently announced a second qualified pathway with Urbix from the US. Urbix is working with Black Rock to explore the opportunity to bring forward product from Black Rock’s second module.

“Black Rock has a diversified product mix with 40% exposure to batteries and 60% to other higher margin large flake markets.

“The company has a modular market entry strategy with four phases planned with production ramping up only as market demand dictates to deliver 340ktpa of graphite in full production.

“This is six times the size of the average graphite mine.

“This operation will deliver outstanding forecast economics of NPV10 nominal US$1.5bn ($2.1bn) for a 26-year mine life.

“All in country agreements and permits are in place, with the company targeting commencement of construction later this year, subject to financing.”

 

EVOLUTION ENERGY METALS (ASX:EV1)

Market Cap: $50 million

“I’d be surprised if we weren’t in the next 2-3 graphite mines developed globally.

“The Chilalo project [in Tanzania] produces a premium quality product, including a large proportion of coarse flake graphite which has been qualified into value-added applications (foil for electronics devices).

“This drives high concentrate sales price and margin.

“Our fine flake has been tested to be ideally suitable for high quality EV and energy storage batteries.

“Chilalo is an advanced construction-ready asset pushing to final investment decision within six months.

“We have a binding offtake with global leader for expandable graphite and graphite foil (YXGC) who in turn supply Apple, Samsung.

“YXGC will supply technology to produce graphite foil via a downstream JV.

“Technology partnerships like this provide potential for value-added downstream processing (ie. to become vertically integrated).

“An established US manufacturer of battery products is also providing technology to produce coated spherical graphite for batteries.

“Our supportive 25% cornerstone investor (ARCH Sustainable Resources Fund) is following their investment through to FID, which de-risks project financing.

“And we have a strong graphite development capability within team (our exec director built Syrah’s graphite plant).”

 

INTERNATIONAL GRAPHITE (ASX:IG6)

Market Cap: $32 million

“IG6 is seeking to become WA’s first fully integrated mine-to-market producer of graphite battery anode material.

“We are the only industry participant globally that can offer this from a #1 ranked mining jurisdiction.

“Our Springdale graphite resource is already identified as a long-life, shallow deposit with a high-grade zone, and significant exploration potential.

“The project is well located in a strong mining precinct with access to infrastructure, and, with a body of metallurgical testwork already undertaken, there should be few barriers to our entry as a graphite concentrate producer.

“Furthermore, we have a sound plan to capture graphite downstream value through our Collie plant. It is the most advanced and largest pilot micronising and spheroidising plant we know of in Australia and has now been successfully commissioned.

“A commercial scale micronising plant is to be brought online in H2 2023 to generate cashflow using imported graphite concentrates.

“The Collie facilities will then be expanded — with purification and coating capability added to treat graphite concentrates we plan to produce at the Springdale mine and further refine into battery anode material.

“IG6 is founded on the technical skills and partnerships of its principals – built from over 15 years of graphite metallurgy, process design, engineering, and feasibility experience on mines around the world.

“We also have strong support from local, state and federal governments and our communities, with Collie emerging as a world class battery metals precinct.”

 

iTECH MINERALS (ASX:ITM)

Market Cap: $42 million

“The Campoona project has the potential to produce a high value spherical graphite in a State [South Australia] with significant production of renewable energy and excellent infrastructure.

“The use of non-HF methods such as caustic baking to purify the concentrate add further weight to the project’s green credentials, which we believe will help us produce a premium product for the renewable energy markets.

“The projects and company are Australian based, making the product attractive to potential offtake partners concerned above security of supply for critical minerals and the ever-increasing focus on projects with good ESG credentials.

“The company has established mining leases and is actively engaged in expanding its resources to meet the increase in demand for battery grade graphite being felt around the globe.”

 

BLACKEARTH MINERALS (ASX:BEM)

Market Cap: $30 million

“BlackEarth Minerals NL is currently a standout graphite play.

“The company has focused on delivering its vision since listing in 2018; ‘to position itself as a material player in the global graphite supply chain’.

“I believe our report card speaks for itself.

“Our primary asset, the Maniry Graphite Project, is in Madagascar, a country with a long mining background and an enviable continuous history of natural graphite production for over 100 years.

“With commencement of our first drill hole in 2018, this project is now due to complete its DFS in October this year.

“12 months ago, the company announced its intentions to establish a downstream expandable graphite facility in India.

“Today, under a JV with an established expandable graphite producer, Metachem, the company has commenced EPCM on a plant to be built in Pune, India, with commissioning due to commence Q1 next year.

“Up to 100% of the product is to be sold to an Austrian company under a legally binding offtake agreement.

“BlackEarth has commenced a scoping study on a battery anode material (BAM) plant to be built in Europe and supply a spheronised purified graphite product suitable for the lithium-ion battery market.

“This follows the extensive independent testing carried out on BlackEarth fine graphite flake concentrate product which was deemed suitable for use in the EV battery industry.

“A strategic development pipeline of projects like this, positions the company well for the future with potentially significant returns for shareholders.”

 

TRITON MINERALS (ASX:TON)

Market Cap: $32 million

Triton’s flagship asset is the Ancuabe graphite project located in the Cabo Delgado province of Mozambique, a stable jurisdiction, with a pro-resource development government.

Cabo Delgado is a proven graphite producing region and there are two operating graphite mines near Ancuabe, including Syrah Resources’ Balama South Mine (150km west) which is the world’s largest graphite producing facility (300,000tpa concentrate).

Ancuabe is a world class development and production-ready asset.

In 2017 a DFS was completed targeting mining and processing of 1 million tonnes per annum of ore to produce 60ktpa of high purity large flake graphite concentrate over a long mine life (27 years).

It envisaged strong returns (US$298m, IRR 37%), with short payback period (3.7 years).

The project will produce a diverse range of graphite concentrates which are suited to the expandable, battery and refractory graphite markets.

The concentrate is predominately large flake and high purity graphite (56%), which commands a premium price. 20% of the concentrate is also fine flake which is suited for the emerging battery graphite market.

 

METALS AUSTRALIA (ASX:MLS)

Market Cap: $30 million

“Metals Australia’s high-grade Lac Rainy Graphite Project in Quebec, Canada, is perfectly situated to take advantage of the US’ acceleration of EV take-up and the push to grow lithium-ion battery manufacture in North America generally.

“The project has an established high-grade resource with potential to grow significantly.

“Spherical graphite and battery testwork is currently underway to assess the potential for Lac Rainy graphite concentrate to be used in battery anodes used by EVs.

“This will be a stepping stone to further drilling to expand resource potential and offtake partnerships to advance the project to development.

“Metals Australia is well funded to aggressively advance all of its opportunities with $19 million cash at the end of June 2022.”

 

RENASCOR RESOURCES (ASX:RNU)

Market Cap: $500 million

“Renascor aims to become a leading supplier of 100% Australian-made, low-cost purified spherical graphite for lithium-ion battery anode makers worldwide.

“Its core asset is the Siviour Graphite Project on the Eyre Peninsula, in South Australia.

“The Siviour Graphite Deposit is the largest reported graphite reserve outside Africa, supporting a proposed 40-year mine life with production of graphite concentrates up to 150,000 tonne per annum.

“The resource at Siviour is 93.5Mt @ 7.3% TGC for 6.9Mt of contained graphite (with 67% classified as Measured or Indicated), and this will feed into Renascor’s optimised Battery Anode Material Study which is currently underway.

“The company plans to build a state-of-the-art processing facility in South Australia to manufacture purified spherical graphite through its eco-friendly purification process.

“The Siviour Project has been granted Major Project status by the Federal Government, and the company has secured conditional approved for a $185 million loan facility from the Australian Government’s $2 billion Critical Minerals Facility, to support the development of the Siviour Project.

“Non-binding offtake agreements are in place with leading global anode companies, including POSCO (South Korea), Zeto and Minguang New Material (China), Hanwa Corporation (Japan) covering up to 60,000tpa of PSG.”

 

SARYTOGAN GRAPHITE (ASX:SGA)

Market Cap: $25 million

“Firstly, we have an exceptionally large and high-grade deposit.

“Our resource is 209Mt at 28.5% TGC, which is typically triple the size and triple the grade of many other graphite projects in the ASX.

“In fact, it is the highest grade and second largest, behind only Syrah Resources.

“The other point of difference for SGA is our location in Kazakhstan, which is wedged between two of the largest battery markets and graphite consumers in the world, being Europe and China.

“Kazakhstan is a very favourable mining jurisdiction.

“We are presently about halfway through a significant 4,000m diamond drilling program.

“We have released the first round of results, and we expect during our drilling program for there to be another 3-4 results announcements to flow through.”

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