Mineral Commodities advances graphite strategy

Perth-based resources firm Mineral Commodities is a step closer to becoming a globally significant supplier to the precursor and anode materials market after confirming the production potential at its Munglinup graphite project in the south of Western Australia.

A definitive feasibility study supports the case for a 14-year mine life accessing an 8mn t mineral resource and a 4.2mn t ore reserve grading around 12.8pc total graphitic carbon, the company said.

With a processing rate of 400,000 t/yr in the first six years and 500,000 t/yr in years seven to 14, the project is expected to produce around 52,000 t/yr of graphite concentrate with a nominal grade of 95pc graphite.

Capital expenditure for the project is estimated at $61mn, with operating costs of around $491/t and a payback period of 2.7 years. The average basket price during the life of the project is estimated at $1,144/t.

Mineral Commodities views Munglinup as a crucial asset in its ambition to build a vertically integrated carbon-based business in two strategic production centres in tier-one regions, Australia and Norway.

The company in October 2019 completed the acquisition of Norway's Skaland Graphite, owner of the world's highest-grade flake graphite Traelen deposit and the Skaland processing facility.

Skaland has been producing up to 10,000 t/yr of graphite concentrate, but regulatory approval has recently been raised to 16,000 t/yr, providing Mineral Commodities with capacity for expansion. The processing plant was operating at only 60pc of nameplate capacity before the acquisition.

"The company intends to implement a vertically integrated development strategy that will provide a broader range of higher-value products, which diversifies the risks associated with supplying the traditional natural flake graphite market," Mineral Commodities said.

It added that technical and economic testing will continue to consider the production of purified, micronised, spheronised and coated graphite concentrate from the Munglinup deposit.

There is growing demand for graphite globally, especially as various industries seek alternate supply sources to China. Graphite is the major ingredient in the anodes of electric vehicle and energy storage batteries and also has other industrial applications.

Mineral Commodities also produces zircon, rutile and ilmenite at its Tormin mineral sands operation in South Africa's Western Cape province.

By Angus Macmillan