Tianshengda signs on for Volt graphite

Tianshengda signs on for Volt graphite

Thu, 02/08/2018 - 16:32
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Volt

Volt boss Trevor Matthews with Tianshengda's Mr Yu. Photo: Volt Resources

Chinese processing group Qingdao Tianshengda Graphite is backing Volt Resources’ Bunyu graphite project in Tanzania, signing a five-year offtake deal as it moves to secure new sources of material to feed into the lithium-ion battery boom.

Volt Resources said Tiangshengda would take 9,000 tonnes of Bunyu production annually for the next five years.

The deal is the second binding offtake arrangement for Volt at Bunyu, in additional to a 1,000tpa contract with US-based Nano Graphene.

Tiangshengda, which also has an offtake in place with ASX-listed graphite junior Triton Minerals, is one of China’s biggest graphite processors, supplying customers in China, Japan and South Korea.

The Volt agreement is conditional on completion of construction and commissioning of the Bunyu project’s first stage, while the selling price will be determined by prevailing market prices.

Volt Resources chief executive Trevor Matthews said the company was very pleased to secure the binding sales agreement.

“This second offtake agreement is a strong validation of the confidence in Volt’s Bunyu graphite project,” Mr Matthews said.

“With strong demand in the market and in particular for large flake graphite, we are continuing to progress discussions with additional parties in respect to further offtake opportunities.”

The first stage Volt’s Bunyu operation is proposed to have a production capacity of 27,300tpa of graphite products, with its startup costs estimated at around $US32 million.

A second stage of construction is also being planned to meet expected increases in demand for course flake graphite, which is used to manufacture battery anode material.

Volt has also held discussions in recent months with Chinese groups CNBN General Technology, Qingdao Guangxing Electronics Materials (GEM), Haida Graphite and Qingdao Baixing Graphite regarding potential offtake agreements.

The company is currently completing environmental approval applications for the first stage of works at Bunyu, while simultaneously working with Exotix Capital to arrange a capital raising to obtain the funds required to construct the mine.

Volt’s preliminary feasibility study indicated it would generate revenue of around $126 million over its seven-year mine life.