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BlackEarth Minerals finalises JV with Metachem to produce expandable graphite

Highlights 

  • BlackEarth Minerals has executed a JV agreement with Metachem Manufacturing Company Pvt. Ltd.
  • In line with the agreement, the joint venture partners are set to construct a plant in India to produce expandable graphite. 
  • The first-year revenue for the JV is estimated to be AU$9 million, which would further ramp up to AU$17 million. 

Making headway in the buoyant expandable graphite market, BlackEarth Minerals NL (ASX:BEM) has executed a joint venture agreement with India-based Metachem Manufacturing Company Pvt. Ltd.

Notably, Metachem, with over 20 years of production experience, is a leading producer of expandable graphite and other downstream products, sold across Europe, Asia, and the US. 

The agreement offers exciting frontiers for growth in the current scenario when the decline in coarse graphite flake supply and the rising graphite price have increased concerns about its supply security among end users. Moreover, demand for expandable graphite from fire retardants, EV industry, alternative energy sectors and growing ESG thematic is expected to provide strong tailwinds.

Commenting on the development, Jayant Pawar, President of Metachem, highlighted that this collaboration with the BlackEarth team would help increase the market share of Metachem in several key markets. Furthermore, the partnership with BlackEarth guarantees the JV a reliable, world-class supply of graphite concentrate both on a short-term and long-term basis.

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A Snapshot of the JV agreement

The JV aims to deliver a material portion of all imports of expandable graphite into the European market. The first-year revenue for the JV is estimated to be AU$9 million, which would further ramp up to AU$17 million when the production would touch the 4,000 tonnes per annum mark. 

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JV agreement, Metachem, Graphite Market

                Source: Copyright © 2021 Kalkine Media, Data Source: BEM update, dated 20 October 2021                    

Recent endeavours under BlackEarth’s expandable graphite strategy

In line with the agreement, the joint venture partners have kicked off plans to develop an expandable graphite plant. The implementation is expected within three months, while the production and sales of expandable graphite are projected in mid-2022. 

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In addition to the current development, BlackEarth has signed an offtake agreement with Grafitbergbau, ensuring that all products in the short term have been presold. 

Moreover, the development will position BlackEarth as the first producer of commercial levels of expandable graphite listed on the ASX.

ALSO READ: How far has BlackEarth Minerals (ASX:BEM) progressed on its expandable graphite strategy?

Road ahead for the expandable graphite plant

Upcoming activities fuelling the expandable plant development would progress between Q4 2021 and Q3 2022.

  • Identification of a suitable site with a Special Economic Zone in India
  • Finalisation of engineering and cost study
  • Further offtake partnerships
  • Commencement of construction
  • Commissioning of the JV expandable plant
  • First sales  

Triggered by the update, BEM stock jumped 4% to AU$0.130 on 20 October 2021.

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