Phase 1 of the Molo graphite project, in Madagascar, has been delayed and the process plant will now only be commissioned in the September quarter, Toronto-listed NextSource reported on Tuesday.

The company explained that although the processing plant, which was fabricated and constructed at an offshore facility, was ready to be shipped to the mine, Covid-19 travel restrictions and recent cyclone activity in Madagascar had delayed the start of earthworks and civil work at the mine site.

NextSource pushed the commissioning of the 17 000 t/y processing plant from the second to the third quarter of 2022. Once operating, Molo would be one of the few producing graphite mines outside China.

Meanwhile, the company on Tuesday also announced the preliminary economic assessment (PEA) of expanding Molo. The Phase 2 study considered an enhanced expansion consisting of a standalone processing plant with a production capacity of 150 000 t/y of flake graphite concentrate over a 26-year mine life.

The PEA projects capital costs for Phase 2 at $155.8-million, with a pretax net present value, using an 8% discount, of $929.6-million and a pre-tax internal rate of return of 41.1%.

CEO Craig Scherba said that he was pleased with the PEA results, which defined strong financial returns and underlined the scalability of the project.

“A Phase 2 expansion of this magnitude will position NextSource as a major global supplier and will underpin our vertical integration strategy to construct our own battery anode facility in due course, enabling direct supply to the electric vehicle battery market.”

The PEA’s enhanced Phase 2 capacity was determined based on discussions with automotive manufacturers (OEMs) and battery anode offtake partners. 

NextSource and its battery anode offtake partners are evaluating construction of a battery anode facility (BAF), capable of converting flake graphite concentrate from any qualified mine into spheronized and purified graphite and into coated SPG (CSPG). CSPG is the final form of natural graphite required to manufacture lithium-ion batteries required by OEMs.

The company in November initiated a technical study to determine the capital and operating costs for its BAF and is considering several proposed locations.