PERTH (miningweekly.com) – Graphite miner Valence Industries this week suspended processing activities at its Uley project, in South Australia, as the company faced a tough financial situation.
MD Robert Mencel said that the suspension of on-site processing would reduce the company’s operating costs by about A$290 000 a month.
“Production at the site has been ongoing at low levels for some months in order for us to achieve some inventory of on-spec material to provide to customers for qualification purposes. The exercise has also been useful to clarify the issues with the existing plant and to assist in design parameters for the revised plant,” Mencel said.
He added that to suspend processing at Uley was a difficult decision; however, he noted that the existing production rate was uneconomic and could not continue.
“The immediate focus is on rebuilding the capital of the company and to re-establish it as a quality graphite producer,” Mencel said.
Valence in September this year cut production at the Uley plant to 50% of its nameplate capacity, and announced a 60% reduction in its workforce at both the Uley operation and at its corporate office in Adelaide, as part of efforts to reduce costs.
Mencel said this week that the company would continue to work on financial solutions to enable production to restart as soon as practicable.
Meanwhile, graphite sample preparation in support of sales and marketing efforts to potential and existing customers would continue using existing stockpiled material.