Alabama Graphite banks on coated spherical graphite as company differentiator

15th January 2016 By: Henry Lazenby - Creamer Media Deputy Editor: North America

TORONTO ( – Canadian project developer Alabama Graphite Corp (AGC) has high hopes to cash in on the burgeoning North American green-energy market, as it plans to provide a ‘made-in-US’ solution to the growing domestic lithium-ion battery market.

Focused on the exploration and development of its flagship Coosa graphite project, in Coosa county, and its Bama mine project, in Chilton county, Alabama, the company has also set its sights firmly on producing specialty coated spherical graphite (CSPG), which was specifically engineered for lithium-ion battery use and fetched a premium in the marketplace.

As the highest-value flake graphite product available, CSPG conservatively and consistently sold for between $7 000/t and $12 000/t in recent times, according to information supplied by Benchmark Mineral Intelligence last year.

Benchmark also forecast that the demand for ‘battery-ready’ graphite would increase more than 213% over the next four years (by 2020), exceeding 250 000 t/y. The current total world consumption of natural flake graphite stood at about 400 000 t/y, while global battery-grade graphite production was estimated at 80 000 t/y.

AGC planned to develop a vertically integrated, comparatively more environment-friendly (without the use of hydrofluoric acid) CSPG manufacturing process that the company believed would enable it to eventually achieve one of the highest-known commercial-production CSPG yields at about 75%, with one of the lowest estimated costs of production at $1 555/t.

With the appointment of former Focus Graphite president and COO Donald Baxter in June 2015, AGC entered a paradigm shift as Baxter embraced an entirely new strategic direction, building and advancing AGC as a US green-energy supply chain producer, with a mandate to address the needs of the rapidly expanding American lithium-ion battery industry.

AGC presented Baxter with the opportunity to advance a graphite company strategically from the onset, as opposed to repairing or attempting to optimise a business strategy that was already cast, the company said in a company update on Thursday.

The Coosa project was located on private land, requiring only Alabama state-level permitting, as opposed to US federal permitting and Environmental Protection Agency approval requirements. AGC believed that Alabama was an established mining friendly jurisdiction, with excellent infrastructure, a year-round temperate climate, and early indications of support from stakeholders and the local and state government levels.

AGC in October 2015 announced that the Coosa project hosted a National Instrument 43-101-compliant indicated mineral resource estimate of 78.5-million tons grading 2.39% graphitic carbon – the largest indicated resource of flake graphite in the US.

A November preliminary economic assessment, which looked at both primary and secondary processing to produce specialty, ultra-high-purity graphite products, as opposed to sole primary processing to make traditional graphite concentrate, confirmed Coosa as a project with low capital intensity and attractive potential returns.

Costing only $43.2-million, the assessment produced an after-tax net present value of $320-million at an 8% discount rate, and an after-tax internal rate of return of 45.7%.

Meanwhile, AGC expected to release the results for its Coosa graphite project pilot plant later this month.

The company explained that, in assessing the key parameters for the pilot plant, it had to look at different metrics when developing a battery materials and technology company compared with a conventional flake graphite development company.

For a battery materials and technology-focused graphite company, the pilot plant results should demonstrate the carbon grade that might be achieved for primary processing. As such, the primary metric of concern was concentrate grade – across all flake sizes – with emphasis on fine flakes. All of AGC’s primary-processed graphite was expected to be diverted to secondary processing for purification, micronisation, spheronisation and carbon coating, to produce finalised CSPG.

The AGC pilot plant was expected to provide a significant amount of feedstock material – multiple tons – to enable all of AGC’s CSPG development work, which was aimed at snatching CSPG manufacturing from deemed inefficient Chinese processors.

Further, the company expected to release independent preliminary test results soon for its lithium-ion batteries, detailing reversible capacity, irreversible capacity loss, particle distribution, loss on ignition, tap density, Brunauer-Emmett-Teller surface area analysis, and Galvanostatic cycling data.

Following the next round of financing that AGC expected to pursue, it would start with a feasibility study for the Coosa project. The study was expected to include a pilot plant for the company’s proprietary CSPG production process, which the company was optimising to increase the quantities of CSPG material produced to kilograms, as potential end-users were requesting multiple-kilogram quantities to evaluate.

The US and global green-energy and clean-technology industries were undergoing unprecedented change and widespread adoption.

The proliferation of electric vehicles, including Faraday Future’s planned $1-billion electric vehicle plant near Las Vegas and Tesla Motors’ $5-billion ‘Gigafactory 1’ located outside of Reno – planning to produce 700 000 electric vehicles a year combined – had made the state of Nevada the Western centre of the new-age automobile industry.

However, AGC advised that it was devoting its efforts toward securing offtake agreements with several potential clients, as opposed to only one. There were several significant lithium-ion battery, anode and stationary-storage (battery) manufacturers in the US – and AGC was preparing CSPG sample material for a number of potential American end-users.