Graphite-focussed Volt Resources (ASX: VRC) has received positive feedback from its potential offtake partner China National Building Materials General Machinery (CNBMGM), which tested samples from Volt Resources’ Bunyu graphite project in Tanzania.
China-based CNBMGM informed Volt Resources that preliminary testing of Bunyu graphite has “been positive” with results indicating the graphite product meets its requirements.
Volt Resources and CNBMGM currently have a non-binding cooperation agreement regarding a potential offtake deal whereby CNBMGM will purchase up to 15,000 tonnes per annum of graphite concentrate from Volt Resources’ initial production at Bunyu.
Under the cooperation agreement, CNBMGM is also looking into providing Volt Resources with engineering, construction and financial support to get the Bunyu graphite project off the ground.
Additionally, Volt Resources’ North American-based customer Nano Graphene has advised the company initial test-work of its flake graphite concentrate was “amongst the highest quality graphite flakes” Nano Graphene had tested.
Nano Graphene has agreed to purchase 5,000 tonnes of Volt Resources’ flake graphite concentrate for an initial five-year period. The duo is currently in discussion to broaden the existing partnership, which includes investigating using Nano Graphene’s proprietary technology to refine Volt Resources’ graphite.
“The fact that Volt’s Bunyu graphite product continues to be validated as premium quality is highly encouraging and we are now working hard to materialise a number of these offtake opportunities in the near-term,” Volt Resources chief executive officer Trevor Matthews said.
Bullish outlook for graphite market
Growing demand and tightening supply in the world’s graphite market has triggered price hikes with the commodity commanding prices not seen for two years, according to the company.
Driving this growth is demand for flake graphite in battery anode and building material applications, combined with supply shortages as a result of China closing its graphite mines due to environmental issues.
Mr Matthews said Volt Resources was “highly encouraged” by the “bullish” global graphite market, including the tightening of supply and growing demand for the mineral in China.
“Graphite is forecast to remain in short supply for the foreseeable future, providing highly conducive conditions to rapidly advance both key operational and funding milestones this year.”
Volt Resources wholly-owns the Bunyu project and aims to become a top three graphite producer by 2020.