Landmark International Graphite agreement

International Graphite (ASX: IG6) is set to develop an expandable graphite facility (EGF) in Europe as an equal part joint venture with Arctic Graphite.

The company has noted Germany as its preferred location for the EGF which has proposed production rates of 3,000t/y and a capital cost estimate of $8.8m.

Graphite Investment Partners (GIP), a major shareholder of Arctic, has committed to arranging at least 50% of the EGF capital cost estimate in non-dilutive funding and has issued a non-binding letter of interest to arrange up to $10m in funding.

Produced by treating flake graphite with intercalating agents, expandable graphite is used in construction materials as a flame retardant, insulation in electronics and in batteries and green steel electrodes.

International Graphite managing director and chief executive Andrew Worland says the partnership brings together the highest calibre of graphite technical and operational expertise, corporate and financial capability and graphite market experience

“Our partners have a deep knowledge of the European graphite market and supply chain and share our vision to establish smaller scale, lower capital cost projects in tier one jurisdictions, that can be brought to production quickly and developed with further expansion capability,” he said.

“Successful execution of the development, financing, construction and operations phases of the EGF and our Collie micronising facility — where construction activities have commenced — would see our company operating two production centres capable of producing approximately 10,000tpa of graphite products.”

Currently, Europe imports most of its expandable graphite consumption requirements and is seeking to create a new independent domestic supply chain.

Graphite Investment Partners principal Aidan Nania says graphite is subject to supply disruption as much as any other commodity.

“The demand fundamentals for expandable graphite are compelling. There is little or no production of expandable graphite in the European Union (EU), although the EU accounts for around 30% of global consumption outside China,” he said.

“We are very pleased to progress our EGF project with International Graphite, who bring a range of synergies to assist in capturing the market opportunity for domestic production of expandable graphite in Europe.”