Graphitecorp, which last year was focused on developing Mount Dromedary mine in Queensland, has just announced a major investment in graphite processing technologies aimed at getting the company ahead of the game.

 

St Baker told Energy News that the battery storage space was evolving so quickly that the company realised the big gains will be made in battery production, not digging rocks out of the ground and selling raw product to the world.

 

 

Last year, St Baker told Energy News that the Mt Dromedary mine location, 125km north of Cloncurry in an historical mining district, one of the best in the world, capable of shipping graphite to key markets such as China, but he no longer sees development of Queensland's most significant graphite deposit as a pressing is.

 

A bankable feasibility study should be complete by mid-year.

 

"We have spent less than $3 million there, and we can easily undertake a significant pivot and move to the other end of the supply chain, and preserve the value of the investment we have made to date on the mine without developing it initially," he explained.

 

The company's shift to the technology, value-adding space, becoming a major supplier of advanced battery materials, equipment and services to the global lithium-ion battery market, is based on its alliances with two new partners: US-based battery developer Coulometrics and North American battery testing equipment and services company Novonix.

 

St Baker said there were few companies that can produce the anode material that will be accepted by the likes of Tesla or BMW in the electric vehicle space. 

 

"The large battery companies, such as Panasonic and Contemporary Amperex Technologies Limited, need to buy Novonix equipment," he said.

 

Batteries in crucial operations, such as grid storage and electric vehicles, need to be developed from the best materials to reduce failure rates, and the Novonix aids in that process, he explained.

 

The company already sells high precision battery testing equipment and services to customers including CATL, Apple, 3M, Panasonic, Bosch and Dyson, as well as US and global EV and battery manufacturers.

 

If not pre-empted by CATL it will take a 66% stake in a cashflow positive business that has already placed over 1000 of its battery testing units in 11 countries and well-funded. 

 

It will pay around $C3.4 million for the interest, and Novonix's founders have elected to take part of that in shares. 

 

 

With Coulometrics the new PUREgraphite JV company is targeting commercial production of ultra-high purity anode materials for Li-Ion batteries by the end of 2017.

 

The anodes are expected to outperform and be produced at lower cost than existing suppliers to the electric vehicles market, St Baker said.

 

 The company believes there is a revolution underway, and it wants to get in at the front end. 

 

Graphitecorp will contribute $US5 million to PUREgraphite, and a further $5 million over the next 12 months to meet ongoing costs. It has a right to acquire a further 25% for $5 million within the next two years.

 

Coulometrics will contribute various plant and equipment and services.

 

Graphitecorp also has the right to exploit excess capacity of the production of graphite anode material greater than 1000 tonnes per annum at cost.

 

St Baker said the economies of scale for battery storage were "beyond the tipping point", opening up the use of batteries in new applications, although the initial focus will be in electric vehicles. 

 

While oil and gas companies say they are not worried about displacement of oil and a key transport fuel, clearly St Baker thinks the switch to EVs will be more rapid than expected.

 

With Mt Dromedary on ice, Graphitecorp expects to buy its raw materials on the open market, most likely China and emerging producers in Mozambique and Tanzania, to produce its anode material.

 

 "We'll source globally, as all the major Li-Ion battery developers do to kick off our business, and we will not be restricted in supply from any one source. You need to source the best in the world to create the best anode in the world," he said.

 

"Mt Dromedary is an option for future supply, but it is not essential today, and it is something we will develop if it becomes economic to do it that way, or if we need to develop a non-China source of spherical graphite, because people want to see diversity of supply."

 

Graphitecorp raised $15.5 million via a convertible note to fund its pivot, backed by Washington H Soul Pattinson and Company, which remains a supportive major shareholder.

 

 

Global demand for cobalt, lithium and graphite is surging, and CATL has announced plans to grow its annual battery capacity sixfold by 2020 to 50 gigawatt hours, which would exceed the annual production of the Tesla Gigafactory, which had already significantly boosted the world demand for graphite. 

 

St Baker said the mine concentrate market is only about a $1.5 billion per annum market, whereas the anode space is already a $1 billion pa business and it is set to triple over the next 10 years, while the entire Li-Ion battery value chain, including the cathode, electrolyte and separator, is worth $10 billion and is also set to triple.