Is Battery Minerals Ready To Ride The Electric Vehicle Wave?

battery minerals

Battery Minerals Limited (ASX: BAT) is all set to produce the battery raw materials to tap in the electric vehicle market. The company is focusing on the procurement of cathode raw material like Nickel, Cobalt, Lithium and is ready to expand its Graphite production amid high demand from China and the other major electric vehicle players. The high demand from China of graphite is mainly due to the output of the electricity storage battery, and graphite is used for the anode construction of the battery. The Chinese market is witnessing a higher consumption of Natural graphite in anode production to circa 35%, and the company is expecting the demand to rise and is ready to supply the raw material in proportion to the demand through its underlying projects. As per the company, Japanese markets are typically consuming 45-50% natural graphite in lithium anode production and the demand from the industry is likely to be steady and increase.

The company is expecting the demand of raw material for the battery to rise steadily and is expecting to be in line with the demand with its operational supply and with its highly probable additional tonnes and Probable additional tonnes through its various underlying projects.  

Montepuez Graphite Project:

As per the latest announcement from the company the reserves of contained graphite at Montepuez ore reserve was 42.19Mt at 9.27% TGC for 3.9Mt of graphite from January 2017 estimates of 3.6Mt an increase of approximately 10%, the increase in ore reserves represents the financial and technical strength of the Montepuez Graphite project.

Operational Parameters:

Mine life at the production rate of 50Ktpa was +50 years at 11.0% Total Graphite Carbon (TGC) with project Capital expenditure CAPEX remaining USD $39.5M. The EBITA per annum from the project was estimated to be greater than $30M per annum excluding any expansion plans amid the independent forecast from BMI, that the graphite price was supposed to be more than US$100 a tonne. The reserve estimated from the different reserve sites (Buffalo and Elephant) in Montepuez as per the company’s latest announcement was at a subtotal of 20.38Mt of graphite with 9.75% TGC in Buffalo site and a subtotal of 21.82Mt of graphite with 8.82% of TGC in the Elephant site led to the total graphite deposit of 42.19Mt with 9.27% TGC.

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Balama Central Graphite Project- Feasibility Study

As per the Feasibility study announced by the company the Balama graphite project in the province of Cabo Delgado in northern Mozambique could generate EBITA of +US$35m a year with a cost of just US$69.4 million. The examination likewise referenced about the metal hold at Balama of 19.7Mt at 11.1% TGC. As per the company’s announcement, the annual graphite production from Balama was approximately 58,000pa with a potential of the Net operating cash flow of more than US$30M per annum.

During the writing of this report, the share of Battery Mineral closed at AU$0.023 (as at 12 February 2019) unchanged to its previous close and made a high of AU$0.024 and a low of AU$0.023 with an average volume of 735,421.


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