Summary
- EcoGraf executed an agreement with the WA Land Authority for a 6.7-hectare site in the Kwinana-Rockingham Industrial Area.
- EcoGrafTM proposed facility to produce 20,000 tonnes per annum of Battery Anode precursors, multi-year sales agreement in place with Thyssenkrupp subsidiary.
- WA government acknowledges EcoGraf’s facility in line with WA’s Future Battery Industry Strategy, strongly supports the development.
- WA may host the entire ecosystem of battery components, strong investments anticipated.
Vertically integrated Graphite aspirer, EcoGraf Limited (ASX:EGR) announced executing an agreement with the WA Land Authority to buy a 6.7 hectare site in the world-class Kwinana-Rockingham Industrial Area, almost 30 kilometres from Perth.
Premium Industrial Realty with Existing Infrastructure
The Kwinana-Rockingham Industrial Area is among the most strategically important industrial areas of WA and a part of the state’s premium industrial realty on the western trade coast. The industrial area is a major contributor to the Western Australian economy and hosts one of the integrated industrial projects within the economically productive zone.
WA’s State Premier Mr Mark McGowan, Minister for Energy Mr Bill Johnstone and DevelopmentWA Chief Executive Mr Frank Marra with EcoGraf’s Robert Pett, Howard Rae and Andrew Spinks Source: EcoGraf ASX Update 28 September 2020
A major benefit EcoGraf will enjoy, would be the availability and proximity to required infrastructure, which is a crucial factor impacting the capital intensity. EcoGraf’s Graphite processing unit is anticipated to be developed at a capital cost of US$72 million, employing over 275 people during the construction phase.
The development is an integral initiative in EcoGraf’s path to vertically integrate graphite business, positioning it to cater to the transitioning clean energy and E-mobility streams.
Strong Government Backing
EcoGraf’s decision to develop first EcoGrafTM facility in Western Australia was based on the strong support from the European Customers, which includes EV manufacturers, seeking to secure stable and sustainable battery grade graphite supply and the government support for the development of the facility.
Furthermore, EcoGraf has obtained customers confidence and inked a multi-year product sales agreement with Thyssenkrupp Materials Trading GmbH.
The large industrial site has been selected to host enough area for future business growth needs to meet the anticipated demand. The proposed 20,000 tonnes per year Graphite plant requires over 2 hectares.
Site layout of 20,000tpa Manufacturing Facility Source: EcoGraf ASX Update 28 September 2020
The Western Australia mineral industry is a leading supplier of battery cathode minerals globally, and EcoGraf’s battery anode will further complement the cathode industry, increasing the region’s exposure to the lithium-ion battery market.
Western Australia is anticipated to evolve as a strategic destination for the critical and battery minerals, especially from the regional mining operations. Leading battery and EV players are also expected to invest heavily in WA, closer to the home of the critical battery minerals of scales similar to the Gigafactory in the UK and the recent ongoing investments in Europe attracting interests from the likes of Tesla Inc.
On 28 September 2020, post the news was published on ASX, EcoGraf traded at $0.190 a share, surging ~26.67% against the previous close.
All financial information pertains to Australian dollar unless stated otherwise.
