PERTH (miningweekly.com) – A scoping study into the Malingunde graphite project, in Malawi, has estimated that the project will cost $29-million to develop, supporting production of 44 000 t/y.
ASX-listed Sovereign Metals on Tuesday reported that the project was expected to have a mine life of some 17 years and a pay-back period of two years, based on a throughput of 475 000 t/y.
The project is estimated to have total operating costs of around $301/t of concentrate, placing it at the bottom of the graphite supply cost curve.
“The scoping study clearly demonstrates the project’s very strong commercial potential which is centered on very low operating and capital costs, and revenues derived from a premium product,” said Sovereign MD Julian Stephens.
“Importantly, the project is not reliant on an unrealistically large scale to reduce operating costs or overly optimistic graphite pricing forecasts. The very low operating cost nature of the project provides protection even against extreme downside pricing scenarios.”
Stephens said that the combination of low operating costs, low capital costs and high-quality concentrates enabled the company to focus on initial entry into existing primary end-markets, including refractories and foundries, allowing product to compete on price point with China.
The potential for entry into developing markets, such as the lithium-ion battery supply chain, is retained as future upside.