EcoGraf inks preliminary graphite offtake deal with Thyssenkrupp on road to financing

EcoGraf ASX EGR graphite offtake deal Thyssenkrupp financing
Under the proposed deal, Thyssenkrupp Materials Trading would purchase 50% of EcoGraf’s planned annual graphite production.

Emerging graphite producer EcoGraf (ASX: EGR) has executed a non-binding agreement with German commodity dealer Thyssenkrupp Materials Trading for the sale of the company’s battery graphite products from its planned Kwinana facility in Western Australia.

This would represent 50% of EcoGraf’s planned annual production and includes purified spherical graphite battery anode material and by-products.

The non-binding deal opens the way for negotiating a long-term commercial agreement for the sale of the graphite and is an important step in securing financing for the new Kwinana plant.

EcoGraf has previously signed a memorandum of understanding with German trading group Technografit covering supply of natural flake graphite.

Managing director Andrew Spinks said the signing of the latest agreement is a milestone event for the company and supports recent federal and state government initiatives to encourage battery manufacturing in Australia.

“The agreement represents a significant step forward in our efforts to secure funding for the new Kwinana facility and confirms the increasing demand by customers for environmentally responsible graphite purification,” he added.

These products are attracting strong interest from the manufacturers of electric vehicles, lithium-ion batteries and battery anodes, all of which are seeking to improve the sustainability of their battery mineral supply chains, the company said.

10-year agreement would see supply increase

The agreement provides for phased increases in sales over the first three years of the 10-year term.

Year one would involve 2,310 tonnes of purified spherical graphite (SpG) and 2,310t of fine; year two would see that raised to 3,600t each of both products; and year three would mean EcoGraf providing 10,200t of SpG and an equal quantity of fines.

The 10-year term would begin at production start-up and be renewable by mutual consent. EcoGraf would meet prescribed specifications: carbon content, particle sizing, moisture, potential of hydrogen, tap density and specific surface area.

Last month, EcoGraf received confirmation that two “leading” European industrial customers had agreed that its high purity graphite met their strict physical and chemical specifications.

This followed an 18-month evaluation process and opened the way for the Australian company to enter sales deals.

Kwinana plant said to be first of kind outside China

The company also announced earlier this year that the federal Export Finance Australia had given conditional confirmation it would consider providing debt finance for the new US$72 million (A$104.4 million) plant.

The planned 20,000t per annum processing plant at Kwinana is said by the company to be the first of its kind outside China and will provide a supply of what EcoGraf has described as “high quality and cost competitive purified spherical graphite” for the lithium-ion battery market.

Thysssenkrupp Materials Trading is a subsidiary of the global Thyssenkrupp group which last financial year generated €42 billion (A$68.3 billion) in global sales.