Photo by: Bloomberg
PERTH (miningweekly.com) – Graphite miner Valence Industries on Thursday told shareholders that the company would focus on the production of higher value refined and reprocessed graphite products as it increased volumes from its Uley project, in South Australia.
Valence recently secured $75-million in debt financing to fund the planned expansion of the Uley project, from 14 000 t/y to an ultimate 64 000 t/y. The expansion would take place in two stages.
Initial plans had seen Valence earmark 59% of the planned production as standard product, with the remaining 5% planned as refined graphite product.
However, the miner said on Thursday that based on market analysis and extensive feedback from customers, the company was contemplating a split of 60:40, with the majority still geared towards standard graphite product.
Valence reported that the strategic shift towards higher value advanced manufacturing of graphite products would increase the average margin a tonne, and the rate of project payback, with low technical risk.
Under the new split, average sales prices under 39 000 t/y, would increase from $1 824/t to $2 911/t, while margins would increase from $1 047/t to $1 941/t.
The expansion programme was scheduled to deliver a combined output capacity of 39 000 t/y by 2016, with output tonnage from the advanced manufacturing facility increasing progressively to reach 40% of total volumes over a three-year period, to 2019.
The decision to increase Uley’s output to an ultimate 64 000 t/y, which was currently scheduled for 2017/18, relative to the increase in output from the advanced manufacturing facility, would be kept under review, based on market developments and customer preference, Valence said.
The company, meanwhile, noted that final engineering and design for the new mining programme, and for the capacity increase to 39 000 t/y would be completed by September, allowing construction to start later in the year.
The design and approvals for the new materials handling facility and advanced manufacturing facility were scheduled for completion in December, allowing construction to start in 2016.