Australian battery metal company Lithium Energy is preparing to compete with China by launching a plan to become one of the few purified spherical graphite (PSG) producers outside of Asian countries.
PSG is a graphite specifically designed for the growing lithium-ion battery anode market, and demand is expected to increase 10 times in the next ten years.
Lithium Energy (ASX:LEL)'s trump card is its Burke graphite project in Queensland, which contains one of the world's highest grade graphite resources.
Lithium Energy does not just dig it out and ship the product overseas as a concentrate, but hopes to obtain the full value of the asset by becoming a downstream producer of PSG.
This will make it one of the few manufacturers outside of China, which actually monopolizes the market supplied through highly toxic chemical processes.
For battery manufacturers and electric vehicle manufacturers who are concerned about supply chain safety and ESG, this makes alternative sources of battery materials attractive.
"As a result, battery manufacturers are increasingly looking for alternative sources of graphite," Lithium Energy said.
"Australia has strong technical capabilities and a series of government-funded programs, such as the Future Battery Industry Cooperative Research Center (CRC). These programs actively support the increase in the value of key local minerals, including graphite, so they can well meet this need."
Lithium Energy has one of the highest grade graphite resources in the world in Burke near Cloncurry in the Queensland Mining Centre.
At 16% true graphitic carbon (1Mt contains graphite), it is 6.3Mt, and when TGC is 20.6% (464,000t total graphitic carbon), it has a higher grade area of 2.3Mt. Burke's grade makes it a perfect raw material for battery level Graphite products.
This location is also important because it is close to the Townsville Energy and Chemical Center in North Queensland, which has been recognized as a center for refining battery production metals.
It is not the only graphite deposit in the area, and Novonix's Dromedary project is also nearby.
This indicates that the region has the prospect of further graphite supply and reserves.
Compared with the manufacturing operations required to import graphite as a bulk commodity from overseas mines, Burke’s location will save transportation costs.
So far, the testing work with Australia's chief scientific institution CSIRO supports Lithium Energy's belief that its products are suitable for the lithium-ion battery market.
A little-known fact is that the weight of graphite in lithium-ion batteries is 10 times that of lithium.
"The testing work carried out by CSIRO is very encouraging for the suitability of Burke graphite in lithium-ion batteries," Lithium Energy said.
"The company continues to work with CSIRO to test and optimize the process used to purify and spheroidize its Burke graphite, which will flow into and help complete the design of the processing plant."
Lithium Energy has established a comprehensive milestone sequence to support its investigation of the establishment of a dedicated, environmentally sustainable manufacturing facility to purify and spheroidize graphite from its high-grade Burke graphite deposit.
Lithium Energy went public this year after being spun off from iron ore miner Strike Resources, and also owns the Solaroz project in Argentina's "Lithium Triangle".
Since its listing in May, the exploration company has risen about 100%, and after announcing its graphite processing plan, it rose 8% to 73c this morning.
This article was developed in collaboration with the stockhead advertiser Lithium Energy at the time of publication.
This article does not constitute financial product recommendations. Before making any financial decisions, you should consider obtaining independent advice.
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November 5, 2021
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