One of China’s leading graphite suppliers has moved closer to finalising an offtake deal with Western Australia-based graphite explorer Triton Minerals.
Triton announced to the ASX today that it had signed a term sheet with Qingdao Tianshengda Graphite Co, which paves the way for a binding agreement for graphite offtake from the explorer’s Ancuabe project to be finalised by March 15.
The term sheet allows for a five-year agreement to take up to 16,000 tonnes each year of Ancuabe graphite concentrate, at a price to be set every three months by prevailing market conditions.
Tianshengda, based in Laiki City in Shandong Province, produces a wide range of graphite products from graphite concentrate, including expandable graphite, flake graphite and powdered graphite.
Expandable graphite is commonly used as a flame retardant, while the most common industrial application of flake graphite is in brake linings and brake shoes in heavy vehicles.
Powdered graphite is used as a slurry in oil drilling and coatings for foundry moulds, and can also be used in a range of lubricants.
Triton Minerals is seeking to finalise binding offtake agreements for up to 50 per cent of production from its Ancuabe operation, which is located in Northern Mozambique, in the first quarter of 2018.
According to the company’s definitive feasibility study for the Ancuabe mine, Triton is targeting annual production of around 60,000 tonnes of graphite concentrate each year, with the Tianshengda agreement taking the company halfway to that goal.
Managing director Peter Canterbury said the company had received considerable interest from potential offtake partners and was on track to secure additional offtake agreements by the middle of the year.
Advanced discussions are also under way with Qingdao Hada Graphite Co, one of the world’s largest producers of graphite.
“We are very pleased to announce the offtake term sheet with Tianshengda, a highly-respected graphite producer,” Mr Canterbury said.
“The term sheet demonstrates the early success of our sales and marketing strategy and the demand for large flake, high purity graphite in the Chinese market, and also underlines the quality of the Ancuabe project.
Triton provided an update on the project earlier this week, saying it was evaluating a number of financing options for the Ancuabe mine.
The company is negotiating with Chinese engineering contractors Sinosteel and MCC for engineering, procurement and construction of the Ancuabe operation, with a preferred partner expected to be announced in April.