JOHANNESBURG (miningweekly.com) – Following the successful completion of a feasibility study on downstream processing of graphite from its Epanko graphite project in Tanzania, ASX-listed Kibaran Resources will establish a pilot plant in Germany that will be expanded to commercial scale for the supply of premium battery graphite to customers in Europe and Asia.
“The success of the feasibility work and the development of the new processing technology provides Kibaran with an exciting opportunity to generate significant additional value for shareholders,” Kibaran reported on Tuesday.
Consequently, the company plans to accelerate the commercialisation of battery graphite production operations during 2018, focussing on the establishment of a modular pilot plant with an initial capability of producing 600 t/y of unpurified battery-grade graphite by the end of 2018.
The pilot plant will then be used in the ramp-up of throughput rates to 20 000 t/y.
Together with the sale of graphite concentrate from Epanko, this will enable Kibaran to supply the full range of graphite products.
The feasibility study, started early this year and led by GR Engineering with the participation of ProGraphite, found that production of battery-grade graphite using Kibaran’s proprietary nonhydrofluoroc acid purification technology delivers environmentally superior battery products at a highly competitive cost.
Kibaran on Tuesday reported that the decision to increase the production rate in the study was based on “strong customer feedback on Kibaran’s eco-friendly processing route and the anticipated 300% to 400% growth in demand (from Japan and Korea alone) from the battery sector from 2020”. According to Kibaran, Japanese and Korean demand growth alone is expected to reach about 120 000 t/y by 2025.
Further, the assessment of product samples met specifications at leading battery anode manufacturers for markets in Japan, Korea, China, Germany and the US.
The study found that the initial investment would be $66-million, which will lead to a pretax net present value of $145-million, an internal rate of return of 34.3% and a yearly earnings before interest, taxes, depreciation and amortisation of $30.5-million.
The battery graphite investment has a payback period of about three years.
The initial expenditure requirements for the pilot plant will be funded through available working capital with a boost from a research and development rebate.
“The results of the feasibility study have exceeded our expectations and I thank GR Engineering and ProGraphite for their dedication and commitment to complete this programme over the course of 2017. Kibaran is now positioned to commercialise its battery graphite processing plans, commencing with a downstream processing pilot plant early next year and I look forward to updating our shareholders as we progress with this exciting addition to our graphite business,” Kibaran MD Andrew Spinks noted on Tuesday.
Prices for battery graphite products have increased significantly this year, with recent pricing for standard-grade graphite increasing from $2 300/t to $3 500/t.
The outlook for battery graphite demand remains positive, with Kibaran expecting further price increases to be supported by several key developments.
These include Chinese battery anode manufacturers doubling installed capacity in 2018, and a restriction in supply due to increasing environmental pressure on natural flake and battery graphite producers in China.
There is also increased pressure to reduce the use of existing hydrofluoric acid purification processes as a result of government and customer environmental concerns as more provinces in China adopt bans on the use of this widely-used, but toxic acid in current graphite purification processes, according to Kibaran.