EcoGraf graphite qualified by European customers

EcoGraf ASX EGR graphite qualified European customers
The qualification of EcoGraf’s high purity battery graphite by two European industrial customers is expected to pave the way for sales arrangements.

Graphite company EcoGraf (ASX: EGR) has received confirmation that its high purity graphite has been qualified by two “leading” European industrial customers as meeting their strict physical and chemical specifications.

The high purity product is produced from low value graphite by-product fines using the EcoGraf’s trademarked purification process.

Receiving qualification followed an extensive 18-month process where EcoGraf’s product samples were evaluated by European customers.

In technical terms, the samples achieved the customers’ strict specifications including particle distribution and surface area requirements.

According to EcoGraf, this confirmation by customers “provides the basis for entering sales arrangements for the value-added fines”.

The company said based on current market prices for equivalent products, these “value-added” fines could attract significantly high prices of around €2,000 (A$3,450) per tonne.

In addition to Europe, EcoGraf managing director Andrew Spinks said market opportunities for this high purity fine graphite are being pursued in Australia.

“Initial discussions have focused on utilising the graphite’s unique properties in areas such as flame retardancy and thermal conductivity,” he said.

Australian processing facility

EcoGraf’s planned 20,000-tonne-per-annum processing facility in Kwinana, Western Australia, is expected to be the “first of its kind outside of China” and will provide a new supply of “high quality and cost competitive purified spherical graphite” for the lithium-ion battery market.

Last month, the company announced it had signed a memorandum of understanding with German trading group Technografit for the supply of natural flake graphite feedstock for the facility.

Under a five-year deal (with the possibility of renewal by mutual agreement), initial feedstock requirements will increase from 10,000t up to 40,000t from 2023.

Mr Spinks said finalising the feedstock supply arrangements was another milestone in the company’s progress to finance and develop its “state-of-the-art” facility.

The deal is expected to be made binding by the end of June.

Debt financing

EcoGraf also recently announced that Australian government agency Export Finance Australia has confirmed, subject to completing a detailed assessment of the project, it will consider providing debt finance for the new US$72 million development.

A detailed financial model has been prepared for the Kwinana funding process that incorporates proposed terms for a US$35 million debt funding package, which would cover about half of the total construction cost.

In its March quarterly report, EcoGraf said it is currently assisting Export Finance Australia to undertake the necessary commercial and technical due diligence processes for the potential debt financing arrangements.

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