Name and Location
Uley graphite project, Australia.

Client
Valence Industries.

Project Description
Valence Industries has completed the feasibility study for the significant expansion of its operating Phase I graphite mining, processing and advanced manufacturing capacity.

The study defines an advanced manufacturing programme for two options – base flake graphite concentrate production at the Uley graphite site and the advanced product handling facilities near the Port of Adelaide.

Valence Industries has ore reserves exceeding two-million tonnes to meet current production and sales programmes, and is drilling its exploration targets to a schedule to match the need for additional future raw material.

The Phase II expansion of the facilities at the Uley graphite site will provide additional processing capacity in 25 000 t/y increments of graphite output to reach 64 000 t/y to effectively match market demand. This Phase II plant is also designed to deliver significant advances in quality, output reliability and reduced processing costs, compared with the existing Phase I plant.

The need to provide efficient and flexible supply of multiple flake graphite products, with certainty of cost and supply time, has determined that an advanced product-handling facility be located near the company’s export port, in Adelaide. The location of such a facility is influenced by not only economics, but also government requirements and its support for value-adding opportunities.

The advanced product-handling facilities will include sophisticated product-blending and packaging operations, a micronisation plant and a scalable pilot plant for high-purity graphite production. Each of these processes adds value and provides greater margin opportunities, reducing reliance on basic flake graphite grades.

The feasibility study also proposes the implementation of a Phase III high-purity and specialist products pilot plant. This is in addition to the early introduction of the Phase III specialist blending in the advanced product-handling facility.

The Phase III pilot plant is designed to further verify Valence Industries’ capacity to deliver micronised and high-purity graphite for a wide range of specialist applications. These specialist graphite applications have the potential to deliver significant added value to the range of specialist graphite product lines already defined by Valence Industries. They are consistent with the company’s advanced manufacturing focus on delivering higher-value products and not on shifting tonnes of graphite.

Net Present Value/Internal Rate of Return
The project has a net present value, at 10% discount rate, of $90-million and an internal rate of retun of 47%.

Value
The combined capital expenditure (capex) of the programme for the Phase II plant expansion programme and for establishing Uley Pit 2 will be $37-million, applied over three years.

The Phase III advanced product-handling project has an initial capex of $13-million to meet customer demand for specialist graphite products.

Duration
Not stated.

Latest Developments
A recent increase in the ore reserve at the Uley project has expanded the project’s net present value by 38%, from A$65-million to A$90-million. The internal rate of return has also increased from 46% to 47%.

Valence announced a 43% increase in the graphite reserve at the Uley project in May, with a 60% increase in the expected mine life to eight years, at an output of 64 000 t/y.

An estimated 2.9-million tonnes, at an average head grade of 12.1%, will be mined during the life of the project.

Key Contracts and Suppliers
Coffey Mining and Valence Industries (ore and mineral resources, geology and mine plan); Bluechip Engineering and Valence Industries (metallurgy); Bluechip Engineering, Advanced Focus and Valence Industries (processing and manufacturing); Insync Supply Chain Management, or ISCM (project logistics); Bluechip Engineering, ISCM, Valence Industries and Clutch Consulting (project infrastructure); Advanced Focus, Bluechip Engineering and Badge Construction (project execution); Bluechip Engineering, Golder Associates, Coffey Mining, Clutch Consulting, ISCM and Badge Construction (capital costs); Bluechip Engineering, Golder Associates, Clutch Consulting, ISCM (operating costs); and Fortis Ago, and Roskill & Valence Industries (financial analysis).

On Budget and on Time?
Not stated.

Contact Details for Project Information
Coffey Mining, tel +61 8 6466 2400, fax +61 8 6466 2450 or email contactus@coffey.com.
Bluechip Engineering, tel + 61 8 9409 1935 or fax 61 8 9309 2318.
Badge Construction, tel +61 8 9208 9700, fax +61 8 9208 9777 or email perth@badge.net.au.
Golder Associates, tel +61 8 9213 7600 or fax +61 8 213 7611.
Fortis Ago, tel +61 8 8122 6888 or email info@fortisago.com.au.
Roskill, tel +44 20 8417 0087, fax +44 20 8417 1308 or email info@roskill.co.uk.