Surge in requests for Evion graphite samples points to turnaround for key battery material
Evion says the growing number of requests for its materials reflects strong demand outlook for the graphite market.
In more evidence that the graphite market is set for a sharp turnaround, Evion Group (ASX: EVG) has reported a big increase in requests for bulk samples of its graphite concentrate for testing by potential customers.
Evion, which is developing the Maniry graphite project in Madagascar, says the growing number of requests for its material reflects the strong demand outlook for graphite.
Industry forecasters say the graphite market will move into deficit this year on the back of the sharply rising demand from the lithium battery industry.
Producers are preparing for a turnaround
Producers of battery anode material (BAM), of which graphite is the core ingredient, are preparing for the turnaround by securing non-Chinese graphite supplies.
Evion says the demand from third-party customers combined with increasing interest in its proposed BAM plant in Europe and its expandable graphite joint venture in India is set to ensure that most of Maniry’s production is covered by binding offtake agreements before project funding is completed.
Maniry is forecast to produce 39,000 million tonnes per anumm of graphite concentrate in stage one, moving to 55,000Mtpa in stage two.
About 50% of stage one is budgeted to supply the BAM plant Evion proposes to build in Europe in partnership with Urbix and a further 10% is expected to feed Evion’s expandable graphite joint venture in India.
Evion expects a further 20-30% will be the subject of binding offtake agreements with third-party customers.
Offtake contracts strengthen Maniry
Managing director Tom Revy said the high percentage of product covered by binding offtake contracts would significantly strengthen the company’s position as it moved to finalise project funding for Maniry.
“A high degree of binding offtake agreements will enable us to conduct funding discussions autonomously from sales arrangements,” Mr Revy said.
“This will in turn help ensure we secure favourable funding terms because we will be able to demonstrate secure, reliable revenue streams and we will not have to tie any funding offer to offtake.”
The growing requests for bulk samples come as Evion moves to complete the environmental and social impact assessment (ESIA) for Maniry.
This ESIA is on track for completion in the June quarter of this year, and is a pre-requisite for securing the project’s final permits and licences.
“Maniry is the cornerstone of Evion’s strategy to be a vertically-integrated supplier of graphite products for use in lithium batteries and other purposes,” Mr Revy said.
“Our timing is ideal given that we are moving into the funding and development stages as the market for graphite is set to gain momentum.”
“The growing interest in our product among BAM producers reflects this pivotal phase in the graphite market and we are moving quickly to capitalise on it.”
Urbix agreement
Evion announced earlier this month that it has entered into a collaborative agreement with Urbix to assess the viability of developing a BAM plant in Germany.
Under the agreement, Evion and Urbix will work together to identify the best site and assess the financial and economic feasibility of building the BAM plant.
The pre-feasibility study will be an extension of the scoping study recently completed and published by Evion which demonstrated a very strong commercial case for the development of a BAM production facility.
Urbix recently signed a JV Agreement with leading battery manufacturer, SK On, South Korea to enable SK On to supply leading car manufacturers, Ford, Hyundai and Volkswagen.