PERTH (miningweekly.com) – ASX-listed Mineral Commodities (MRC) has announced plans to form a sustainable graphite business in Europe, following a strategic review process.
The review process, which was aimed at optimising the company’s corporate and capital structure to fund future growth and accelerate shareholder value, concluded that creating a pure-play, integrated battery anode material company concentrated on European ‘sustainable anode’ development made strategic, value accretive and operational sense.
MRC was now planning to transition its existing European graphite production to downstream anode production for the electric vehicle and energy storage markets.
The transition will require a step-change in investment over the next 18 months to support demonstration-scale activities for the production and qualification of anode materials and delivery of higher quality concentrates from the existing Skaland graphite mine, from an expanded production base.
MRC told shareholders that the timing of these activities is driven by the significant growth of battery cell manufacturing capacity in Europe.
“MRC's Norwegian graphite assets are of leading quality: located within a Tier 1 jurisdiction, with a rapid increase in battery demand,” said chairperson David Baker.
“Our value generation is characterised by well-advanced studies and development plans, including for vertical integration. Skaland, as a permitted, operating mine in Norway with its high-grade ore and hydropower electricity, is ideally positioned to supply anode materials to Europe and the demerger will assist in accelerating this process.”
The Norwegian graphite assets would now be demerged into a separte entity newly incorporated in Norway, known as Ascent Graphite.
Initially, Ascent Graphite will seek funding via an equity issue to investors as part of a planned capital raising. The company is also considering an initial listing of Ascent Graphite on a European stock exchange, although no definitive plans have been agreed for this.
In the near term, MRC intends to retain a significant equity holding in Ascent Graphite to capitalise on any value creation resulting from the demerger.
After a number of targeted value milestones are achieved, Ascent Graphite may seek an expanded listing on additional exchanges in the US, the UK or Europe, at which point MRC shareholders may be given the opportunity to directly participate in the demerged entity via an in-specie distribution of the company's shares in Ascent Graphite.