EDITOR: | September 29th, 2013 | 59 Comments

Asian tigers jostle for graphite supremacy

| September 29, 2013 | 59 Comments

rbatgTwo neighbours in graphite — but two diverging stories. China, trying to cling on to its supremacy with its grasp weakened with every passing discovery elsewhere. South Korea, wanting more and more graphite, a major resource across the demilitarized zone in North Korea and thus unobtainable for Seoul, even though the north‘s output is greater than South Korea‘s present annual consumption.

Neither country, China or South Korea, has too many options considering one important fact as spelled out recently by Gerard Anderson, writing in his company’s annual report, his company being Archer Exploration which has an advanced exploration project in South Australia. That fact is: “Substitution of graphite by other minerals is highly unlikely as no mineral is so versatile and with such unique and important and physical properties”.

Here’s another factor: who is producing the graphite. As of 2011, this was the ranking:

  1. China 800,000 tonnes
  2. India 150,000 tonnes
  3. Brazil 75,000 tonnes
  4. North Korea 30,000 tonnes
  5. Canada 26,000 tonnes
  6. Russia 14,000 tonnes
  7. Mexico 8,000 tonnes
  8. Norway 8,000 tonnes
  9. Romania 7,000 tonnes

(Of course, China will maintain its supremacy but some of the lower rankings could change as new producers — one thinks of Mozambique, Madagascar, Australia, Sweden and others — emerge.)

First China. Anderson sums up the situation there and underlines a point we have been making here on Investor Intel. That is, Chinese graphite is declining in quality as easily mined surface oxide deposits are being depleted. Costs are also under considerable pressure from tightening labour and environmental standards. One thing that is now generally accepted is that around 200 mines in Hunan have been closed on government orders.

Second, South Korea. Its present consumption is around 20,000 tonnes a year. This must grow, and grow fast. South Korea hosts major steel and automobile industries, both big users of graphite. And we are seeing developments with South Korean companies such as Samsung, LG Chemicals and Hyundai becoming more involved with technological developments in electronics, batteries and automobiles, the principle sectors that are driving new demand for flake graphite. South Korea is one of the largest global consumers of graphite, and certain to get to become a much bigger one.

This week we noted an interesting new announcement by Lamboo Resources, an Australian company with graphite exploration under way in South Korea (and, so far, one of a very few who have bothered to start looking for the mineral there).

Lamboo set out just what is happening in South Korea. Substantial South Korean multinational enterprises have announced a focus on products which require high quality flake graphite, such as lithium-ion batteries, super capacitors and graphene.

It is being run by KCTECH, an organisation started in 2002 under another name but changed this year to Korea Institute of Carbon Convergence Technology. KCTECH is working with 17 corporations; one, Hyosung ( a typical Korean conglomerate or chaebol, will invest $1.2 billion in this program by 2020 to increase carbon-based material production. Samsung is financing research into commercial applications for graphene.

Also, if South Korea can lift graphite production, there are potential export markets, particularly China and Japan. Lamboo says demand for flake graphite in North Asia is expected to grow far more over the next five years that demand in the rest of the world.

It will be an Asian game-changer if South Korea can master the new technology — and, at the same time, start producing its own graphite. China’s grip on the industry would be weakened even further.



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  • Dr. Copper

    Another great articke from Mr. Bromby. Thank you.

    To me it already looks like supply is well short. Steel industry
    is growing and China has re-established their Electric Arc
    Industry installing many new mills all requiring graphite
    rods to melt scrap heaps as part of their environmental
    conversion to reduce air pollution from gasking steel works

    Advanced Minerals Group stopped developement on the 6,000 metric
    tonnes per annum mining lease grant at Ancuaba, Mozambique.

    Energizer curtailed their Molo Graphite project on Madagasgar.

    Stratmin is speeding up pilot plant to produce from outcrops.

    Australia has Archer Exploration with High Purity Project and Lincoln
    Minerals Kookaburra Gully flake Graphite as most advanced.

    Sweden has Kringel in re-furbishing mode.

    Not a great deal of new graphite supply has seen the living day light
    in the last two years. It is likely the extra demand you mentioned in
    batteries, forging and auto has been meet by Synthetic Graphite.

    The Canadians will likely meet rising U.S demand since Mexico cant match
    the High Purity deposits being developed by Zenyatta. Mason will
    likely fill the supply gap from Timcal.

    That leaves Japan which has traditionally been Australia’s most stable
    investment partner. Japan is the World number one producer of anodes
    for lithium batteries traditionally supplied by High Purity Synthetic Graphite.

    Its little wonder it is consistent supply sources which drives the graphite

    September 29, 2013 - 1:20 PM

    • Tim Ainsworth

      Re Australia you might discover that Uley, a very similar story to Flinders, is rather more advanced when it relists shortly as Valence, subject to the business plan of course.

      September 30, 2013 - 1:17 PM

  • Islay

    Good points made by Mr Bromby, and Dr Copper.

    However, there are a couple of other facts which could put the situation into sharper perspective.

    First, mention is made of current producers. But what about current consumers? China, as well as being currently the largest producer, is also easily the largest user of graphite. Because their own reserves are becoming depleted, with low volume per mine, and high production costs, the Chinese are looking elsewhere for substantial producers who can provide a guarantee of volume supply into the future.

    Considering production, the deposit at Balama, in Mozambique, (owned by Syrah Resources, of Australia – SYR) is now known to be substantially larger than ALL the other deposits in the world combined, including China. They are due to commence production late 2014, at an initial rate of 220K tonnes of graphite per year, which is about 20% of current world demand. Costs have been projected by the company to be among the lowest, if not the lowest, in the world. The mine site has excellent infrastructure (power, water, main road access, port facilities).

    Balama will have a formidable impact on the economics of any new entrant into the market, as well as to current producers.

    September 29, 2013 - 11:40 PM

  • Goldman

    “They are due to commence production late 2014, at an initial rate of 220K tonnes”
    They dont even have any metallurgical results, no PEA, no BFS…nothing
    and you say that they will built a mine in 12 months to produce late in 2014?
    “The mine site has excellent infrastructure (power, water, main road access, port facilities)”
    The “mine” site is in the middle of nowhere in a highly unstable country

    Please stop doing that, you dont fool anyone here

    September 30, 2013 - 4:39 AM

  • TW

    Spot on Goldman! How long can this SYR nonsense continue to be perpetuated? Please show me the metallurgy across the entire ‘high grade’ deposit (graphite or vanadium?!) and how the flow sheet would process out the vanadium without damaging the flake at the front end. As far as I am aware no other company in the world has managed to crack this code. There has been diamond core available to any potential off takers / traders for some time now and we are yet to see any sort of non binding let along binding MOU signed with a partner and I can only assume they have seen the core and don’t like what they see? In my mind SYR is a market play and nothing else and with a market capitalisation of $400m plus I sense this isn’t going to be a soft landing once the market gets educated and understands the sector and its nuances.

    September 30, 2013 - 5:10 AM

  • Islay

    I can understand Goldman and TW being concerned about the realisation that there is an elephant in the room. trying to dismiss all discussion by saying “stop doing that” and “nonsense” may produce a warm inner glow, but it is no basis for making decisions about investments.

    I happen to believe such decisions should be based on seeing the world as it is, not how we might like it to be. I suspect that Goldman and TW are simply behind the times, and are not aware of the formally announced material on the project. Allow me to go though some of their ctiticisms, and bring them up-to-date. I emphasise, these are not rumors, but formal announcements through the Australian Stock Exchange.

    Goldman claims that the mine site is “in the middle of nowhere, in a highly unstable country”. Balama is actually four hours drive from the port of Pemba, on the main road. All but the last 40 km is bitumen, and that stretch is currently being sealed, with completion due in a few months.

    The government is extending grid power to the mine site, and connection is expected before the end of this year. Ample power will then be available (Mozambique has large quantities of cheap hydro power). The price is about 4.5 cents per kilowatt hour. How does that compare with what you pay?

    There is a large dam at Chipembe, about 14 kilometres away. A contract has already been signed to provide all the water required for the initial planned production of 220 K tonnes of graphite per year.

    Port facilities are in place, and access agreed for the full planned initial production.

    As far as stability is concerned, the civil war ended more that 15 years ago. The present government appears secure, and is clearly development-focused. The project has very strong support at the local level, and it appears most unlikely that there will be any significant environmentally based opposition.

    TW asks for details of the metallurgy, and asserts that nobody has successfully separated the vanadium from graphite. This is just not true. Formal metallurgical work at independent laboratories in Johannesburg have shown, first, that simple flotation cleanly removes the graphite at the first stage. Approximately 75% of the vanadium is in a weakly-magnetic form, and can be extracted from the remaining material while still wet, using magnetic separation. That low-cost, readily available power will come in handy there! The initial testwork has processed a bulk sample of the ore to a V2O5 concentrate of 5.02%, with recoveries of 75%. Incidentally, that is a higher grade than is produced at the Largo Resources Maracas project, in Brazil, which produces an average concentrate grade of under 3.5%. According to Ocean Equities Vanadium Sector Review, 15 July 2011, Largo produces the highest grade vanadium concentrate in the world.

    Don’t forget, either, that Maracas has a strip ratio of 6.27:1. At Balama, the surface outcrop is so large that strip ratios will be essentially zero for many years (or decades).

    Again, I stress that all this information is in the public domain , and can be verified by anybody who cares to spend ten minutes on the net. It doesn’t take much time or effort to get the facts, and informed investment decisions will always do better than guesses.

    Finally, it is clear that Syrah are investigating other markets for product from their enormous resource – such as petroleum coke replacement, and graphite anodes. These markets are at least ten times as large as the flake graphite market, and, because of the value of the contained vanadium, should be highly economic, even at much lower graphite prices. On my model, they result in an NPV several times greater than that from flake graphite/vanadium alone. (Those calculations are mine, and not from the company, so do your own sums to check them). Even without these additional market areas the returns from flake graphite and vanadium production alone gives an NPV which is a multiple of the current market cap. Again, don’t take my word for it, do the numbers yourself. It’s not hard.

    I trust this will put a little more light, and a little less heat, into a very interesting discussion.

    October 1, 2013 - 9:33 AM

    • Ty Dinwoodie

      Gadzooks! What superb commentary. Thank you.

      October 1, 2013 - 9:38 AM

  • Dr. Copper

    I have conducted some research on Syrah Resources of late
    because something does not add up.

    It would appear that this blogger from various Australian On-line share forums has demonstrated criminal and insider knowledge
    over a long time often with multiple identities and outright false and mis-leading commentary towards most other graphite exploration companies. Additional research is pointing towards, without prejudice, that the person behind this identity is Mr. Michael Chester whom up to his recent resignation was a Non-Executive Director of Syrah Resources. Mr. Chester has been questioned for alleged corruption and bribery in regard to tenement grants to Australian coal explorer NuCoal. He has been presented with questioning beyond his ability to produce an honorable and believable answer. The case is on-going. Perhaps Mr. Bromby who I understand is residing
    in Australia can comment if of interest.

    High Frequency Trading in particular in Syrah’s securities has been combined with numerous on-line stock forum promotions by the stock brokers behind vending shares to Directors of Syrah Resources and their Chairman’s affiliated listed Company holding a free stake in Syrah Resources.
    There seem heavy activity around the times when either Directors
    is selling shares or otherwise prior to change in substantial holdings.
    A recent appointed Director at Syrah Resources is a previous employee of Australian based Shaw Stockbroking. The recently employed director was vested an substantial amount of shares when Syrah Resources first emerged and all-be-it whilst employed with Shaw Stockbroking. Currently Syrah has a market cap of nearly 400 million Australian Dollars without any evidence of a product which
    is marketable from a barren and greenfield exploration ground.
    I have previously referred to the Swedish Embassy in Maputo for
    ground information surrounding Syrah Resources Balama
    tenements. I think readers should investigate. Adding to this I
    likewise just found research in Australia linking Syrah Resources Balama tenements to widely host uranium mineralization. A chapter not yet announced and explored. It can be found here >


    October 1, 2013 - 1:36 PM

  • Islay

    Dr Copper’s allegations regarding my identity and actions are totally untrue, and are categorically denied. His claim that I have done something criminal is libelous nonsense.

    I am not Michael Chester, nor have I ever met, spoken to, or communicated with him. Nor have I ever published or used “insider knowledge” (which I don’t have, anyway). Any posts I make to forums are based on publicly available material, and I challenge Dr Copper to show otherwise. Sure, I produce my own models, from which I draw conclusions, as do thousands of other people. If that has become illegal, I plead guilty!

    Dr Copper’s claim regarding uranium at Balama relates to an airborne survey, run about six years ago, which reported radioactivity. The then owners of the lease followed up with ground surveys, found nothing, sold the lease to another company who also ran ground surveys and found no uranium. They, in turn, sold the leases to yet another company, which was ultimately folded into Syrah. Only then did somebody realize that, while there was no uranium, there were enormous amounts of graphite. When drilling started, the vanadium was noticed, and quickly became an important part of the economic equation.

    While high frequency trading is part of the Australian market scene, as it is in the US, I am not aware of any “stock forum promotions by the stockbrokers behind vending shares of Syrah Resources”, and I frankly doubt whether any such “promotions” have actually taken place.

    A former Australian politician, and now political commentator, Graham Richardson, once said:

    “If you have to choose between a conspiracy theory and a stuff-up, go for the stuff-up every time”

    But maybe Dr Copper thinks conspiracy theories are more fun.

    October 1, 2013 - 8:52 PM

    • Goldman

      Hi again,

      1) As you said yourself, everything, the road, the water, the electricty is absent at the current time. So, effectively, today the site has no infrastructure at all at the current time. I still struggle to see how the mine will be producing 220k in late 2014 under these circunstances.
      2) Out of 203 countries, Mozambique ranks the 10th country with the highest political risk in the world, tied with Swaziland. Again, I hardly see this as an stable political enviroment
      3) This is a link to the report prepared by the MSA Group to Jacana Resoruces highlighting the uranium anomalism (sep 2011).
      Its says “A site visit was completed by Jacana personnel in November 2010, during which car
      borne and foot traverses (with a handheld spectrometer) were effective in validating the
      radiometric anomaly as well as the association of uranium with graphitic schists.”

      This contradicts your claims that “The then owners of the lease followed up with ground surveys, found nothing, sold the lease to another company who also ran ground surveys and found no uranium. They, in turn, sold the leases to yet another company, which was ultimately folded into Syrah.”

      4)The company has not released any metallurgical results confirming that the product is marketable. It would have been recommended that the company had prepared a detailed mapping and trenching/sampling programme over the entire area in order to delineate the quality of graphite being
      exposed, as this parameter is critical to the proper development of this project.

      4) Thanks to Dr Cooper and TW for their contributions.

      October 2, 2013 - 10:01 AM

      • Sue Glover

        Thanks to everyone here for their commentary and contribution. It is this type of open honest debate that brings valuable information to light.

        October 2, 2013 - 4:21 PM

        • Dr. Copper

          I cannot see what the problem is – Syrah Resources has not reported on the most
          important aspect of their ground, the uranium anomaly. It is kept under the carpet whilst the world of chemists can
          read it is all there. If there was nothing to
          hide, it would have been reported at first
          hand via testing processes. It is clear not
          been reported.

          You have to consider the silence in particular with all the evidence provided that we are looking for a consistent and reliable graphite product which is tested
          across its whole definitions.

          Perhaps Syrah Resources strategy is to
          let Mr. Islay or Mr. Chester to the clarification over these web sites ?

          One would have thought that it should have been a complete other audience who needed to read what is actually hiding in those Balama assays, and the questioning
          of same it obviously causing a defensive
          reaction, by someone who claim to know
          absolutely nothing.

          You be your own judge.

          October 3, 2013 - 5:42 PM

          • Islay

            Dr Copper, the glaringly obvious inference is that the world of chemists produced NO evidence of any significant uranium. Everyone knew about the radiometric anomaly, and sent in their geologists to follow-up. It is precisely their samples which go to the chemists to assess if there is any uranium. Any success would have been trumpeted to the skies. And the companies would certainly not have let the lease go for peanuts, which is what happened. (I understand that African Eagle sold the lease to Jacana/Syrah for $1.5m.

            Do you really think that would have happened if they thought for a minute there was any useful uranium there?

            October 4, 2013 - 9:29 AM

          • Dr. Copper

            You are full of deception and outright lies, a complete disgrace to all Australians.

            There is no Uranium results published from Syrah Resources
            on both rock chip samples nor
            from any drilling in Mozambique.

            That is what matters, I am not interested in your opinions
            of complete utter denial.

            Anything you state is to abuse
            the good of this excellent website
            sharing critical minerals articles
            and brief round-ups.

            Take your graphite bubble theories somewhere else, it looks like no
            one is interested and all can see
            the flaw on the value proposition
            of Syrah Resources.

            The Balama ground is worthless.

            Only a thief returns in the night.

            October 6, 2013 - 3:15 AM

  • Islay

    Thanks, Goldman, for your input and comments.

    Looking at the infrastructure position, I do not think it is reasonable to say that, because everything is not there today, nothing is there, or will be in comfortable time. The road is there today. Yes, the last 40 km are in the process of being sealed, but it drives quite well now, and will be even better by the end of 1Q 2014. The power poles are “marching over the hill” right now, and connection to the national electricity grid is expected next month. Water rights to Chipembe Dam have been secured, paid and confirmed. The Pemba port authorities have confirmed that facilities and slots are available for product shipment.

    Is the start-up date of late 2014 realistic? Think about what is involved. The mine will be a very simple open cut, with a crusher and flotation circuit – technology a hundred years old, with the gear almost off-the-shelf. It’s essentially a large quarry, with no overburden. Initially, the company may not even extract the vanadium, which would, of course, make for a very simple plant at start-up. The announced schedule suggests that plant design and ordering is well under way. If that is correct, the timescale seems quite feasible.

    The radiometric anomaly is interesting. It was obviously well-known, and each of the companies which have held the license has gone looking for uranium. Uranium is valuable. They all had their geologists searching for it. Nobody has come up with anything. Draw your own conclusions.

    I am puzzled by your point 4), which claims:

    “The company has not released any metallurgical results confirming the product is marketable. …recommended that the company prepared a detailed mapping and trenching/sampling program …”

    That is exactly what has happened, and has been reported at length, and in detail, in many statements. The most recent relevant announcements were issued on 11 September, 4 September, 20 August, 24 July, 4 June, 3 June, and 27 May.

    The suggestion that such a program should cover the entire area is not realistic. Remember, this deposit is substantially larger than ALL the rest of the world’s graphite deposits, combined. There is enough graphite there to meet total current world demand for at least a century. Consequently, Syrah have elected to simply select a couple of the richer zones to start mining. There are three such zones nominated, (Ativa, Mepiche, and Mualia) and each of them is an orebody comparable to the largest other known deposits in the world. So why bother doing more drilling at this stage? The Ativa zone, alone, contains 21 million tonnes, @ 20.8% graphite, and 0.38% V2O5, and has a surface outcrop of 1.3 kilometres. Should keep them busy for quite a while.

    Political risk is real, I agree. But, in Africa, an eighteen year record of stability is not to be sneezed at. If the risks are higher than for a potential mine in Canada, then so, unquestionably are the rewards. In my model, I use a discount rate of 12% for my NPV calculations. If you don’t like that, pick your own number. When you are looking at an operation where the investment payback period is measured in months, not years, it does not matter too much. (And, by the way, not many months, either)

    To my knowledge, there is only one other mineral where a single company has, or is likely to have, such dominance of the world market . (That is Niobium) Think about the position in those terms, and consider the impact.

    October 2, 2013 - 7:49 PM

  • Islay

    Dr Copper, thank you for your careful and polite contribution. The clarity of your argument, and the profound character of your analysis will, I am sure, make it easy for other readers of this thread to assess the true value of your postings.

    October 6, 2013 - 12:34 PM

  • Dr. Copper

    You have no right to thank me and I dont accept your personal attacks
    and your continued belittlement one moment.

    That should end the discussion until Syrah Resources provide
    that critical confirmation of what Helio Resources identified as
    an huge substantial uranium anomaly at the Balama ground
    which despite numerous outcropping collected and drill cores
    has failed to mention of and in both the stipulated vanadium
    rocks and graphite schists assay results.

    It bear no introduction that your ignorance of the research provided
    by Mr. Bromby has gone thru your head as a whistle in the wind.

    Your reaction may stem out of that Syrah thinks they have more
    graphite than glacier ice in the Himalayas, all I just say is this:-

    Prove it because right now the doubt is killing your creditibity.

    October 6, 2013 - 1:19 PM

    • Islay

      The Helio Resources report is available on their site at:


      Anyone who looks at it will see that the bulk of the area records less than 5 ppm of uranium, a small amount is in the 10 ppm range, and two tiny spots show greater than 20 ppm. The results are not superimposed on any geographic map, so it is not possible to see whether there the two small black spots (> 20 ppm) actually relate to the granite intrusion in the area (Mt Coronge), though that is vaguely suggested in the text.

      What counts is what has been said before: two companies (Helio Resources and African Eagle) investigated this anomaly on the ground, both looking for uranium (which was valuable then, if not now), and both voted with their feet by selling the lease cheaply.

      Their actions represent the most telling statement about the uranium content at Balama.

      Sorry, Dr Copper. You are flogging a dead horse.

      October 6, 2013 - 8:27 PM

      • Dr. Copper

        Mr. Islay,

        The links has been provided by me and others long before you, everyone can see the color legend and read it for themselves but Syrah Resources obmitted same color legend from
        their own announcements, and never reported
        the Uranium readings from the outcrops and later drill results over the same zones.

        Syrah Resourcs never announced any Uranium results of something Helio Resources and Mr. Siegfield considered a substantial Uranium
        prospect in Vanadium rocks and Graphite schists.

        So here is the thing, Syrah Resources is blowing
        their own bubbles and you are knotting them.

        Well done Australia.

        October 6, 2013 - 11:24 PM

        • Matthew

          Thanks Dr Copper and Goldman for your insights on this one as it seems to me that something does not add up with the information being provided by Syrah Resources.

          As a regular punter reading this discussion and someone who invests in many exploration companies, the information/argument being provided by Islay is definately skewed.

          Can I ask you both to please provide your opinions on Uranex Limited (UNX – ASX) as they have recently completed a trenching campaign and recently published the first set of EM Results relating to a potential High Grade Graphite deposit which covers a huge area. Their current market cap is $10 million for a deposit that is shaping up to be one of the largest in the world.

          Very importantly Metallurgical Samples so far show no Vanadium or Uranium or any other element.


          October 8, 2013 - 1:40 AM

          • Dr. Copper

            Matthew, in graphite its not how large a volume or how big your graphite grades in outcrops or drill cores show, it is what the rocks contain which will determine and enable you to extract and produce a reliable and consistent product you can sell, and not what otherwise skew and flaws you may read.

            Before you get there, you need the
            right people who has knowledge in scientific extractive chemistry whom can be demonstrate and manage production on a scale which is much larger than lab results as provided for instance by SGS. There is other instances who
            certify purity on a rigthous path.

            These grounds in East Africa is part of one of the mantle-plumes discovered, its not breaking news they contain Contaminents, what’s breaking news is they have all seemed to have disappeared with
            the latest graphite explorers in East Africa.

            October 8, 2013 - 11:32 AM

  • Islay

    Matthew, UNX are chasing graphite, right? So why do we hear about the elements which are NOT there? Wouldn’t it be more informative to learn about the graphite content, which much surely have been determined, since they have stated they are using mass spectrophotometric analysis?

    When we have answers as to the graphite content, then we can assess the prospects for a graphite mine.

    October 11, 2013 - 8:41 AM

    • Dr. Copper

      sorry folks, didnt see Mr. Cbester’s reply to Matthew’s
      question at first.

      Mr. Chester is questioning elements NOT there….

      Why would he do actually do that, as Syrah Resources
      has indded failed to report the same.

      Another thing I have discovered long ago is the
      ability of these Syrah Resources brokers to appear
      on various website with in-different identities but
      same posting style, It actually mainly only involves
      Archer Exploration (see my earlier explanation)
      and the psychology they use can be quite
      easy to spot, but it require you take your time
      to follow the dialogs.

      So Matthew, unless you are one of ‘them’ just
      be careful.

      October 12, 2013 - 2:08 PM

  • Goldman

    As of recently there is an interesting discussion and views on the uranium issue at BAlama at hotCopper (search for syrah)
    investors are quickly understanding that there is something wrong with that ground. Its seems pretty clear why the lease Was sold so cheaply at the peak of graphite prices. It is worthless.


    October 11, 2013 - 5:04 PM

    • Islay

      Goldman, I suspect you are missing a crucial point in your assessment of the reasons why the lease changed hands at low prices.

      It is this: the Balama lease was considered by Helios Resources, and by African Eagle (to whom Helios sold the lease) purely as a uranium prospect. Though graphitic schists were mentioned in passing in the report of the aerial study carried out in 2006, thes were perceived purely as receptors for hypothetical uranium-bearing hydrothermal fluids. The idea that they might be sitting on the largest and richest graphite deposit in the world simply did not occur to them.

      No less than three prospecting companies read the (highly optimistic!) aerial survey report, and sent their geologists in to check out the presumed targets, on the ground. Sad to say, not one of those three attempts turned up any significant uranium, despite having the aerial survey information.

      When it comes to working out whether there really is any uranium there, who do you believe? Is it the report of an aerial survey, covering the whole region, or is it the reports of the THREE separate teams of geologists, sampling on the ground, with the points of interest clearly defined? No rational person could suggest that the airborne study is right, and the ground-based, sample-collecting geologists were wrong.

      Only when Syrah gained control of the lease was the graphite potential made the subject of a study. The rest is history. The idea that there is still significant uranium in the orebody is a flight of fancy.

      If somebody wants so desperately to believe that Balama will not be a major competitor to other graphite miners, then so be it. But any such attitude is, by now, akin to a religious dogma, rather than a realistic, logically-based piece of data. I wish any such people well, and I wish them a lot of luck. They will probably need it.

      October 12, 2013 - 5:18 AM

  • Goldman

    Hi Islay,

    We already discussed that uranium has been found in the ground.

    You claimed that ” … The then owners of the lease followed up with ground surveys, found nothing, sold the lease to another company who also ran ground surveys and found no uranium. They, in turn, sold the leases to yet another company, which was ultimately folded into Syrah. Only then did somebody realize that, while there was no uranium…”

    I showed that its not true “This is a link to the report prepared by the MSA Group to Jacana Resoruces highlighting the uranium anomalism (sep 2011).
    Its says “A site visit was completed by Jacana personnel in November 2010, during which car
    borne and foot traverses (with a handheld spectrometer) were effective in validating the
    radiometric anomaly as well as the association of uranium with graphitic schists.” –

    So, there is uranium there and Syrah has hidden that and manipulated the information in their publications, hiding the radiometric response in their press releases. These are facts, public information. The only one desperately denying that is you, over and over. But it does not matter, in the next post you will write again that there is no uranium. I wont answer any more. I prefer to read Dr Copper posts instead that are far more interesting.

    So, there is uranium, graphite and vanadium. 3 minerals with 3 different methods requirements to extract them. And we lack enough metallurgical information.

    I am sure that the uranium is uneconomic in Balama and that’s the reason why Helio and Africa dismissed the exploration for uranium. But, the fact that uranium is uneconomic in this ground does not mean that graphite is extractable, economic and suitable for buyers (actually there is no news from any potential buyer despite the amazing credentials of Syrah).

    So, do you want us to believe that all these geogolists from different mining exploration companies did not realize that there was economic graphite there when the graphite sector was on fire? But Mr Kumova and his previous business partner Paul Kehoe, with no mining experience but with investment banking and accounting backgrounds, did know?. I dont buy it.

    These same managers claim that Syrah (as you do too in recent posts) can compete in the synthetic market for calcined coke and anodes (more than 17bn$ combined according to your post). Well, please note that NATURAL GRAPHITE DOES NOT HAVE THE PROPERTIES TO BE USED IN PRODUCING OR REPLACING SYNTHETIC GRAPHITE REGARDLESS OF PURITY. Only in spherical graphite for LiBs could natural and synthetic compete. These same managers messed up with the publication of the scoping study on June 2013.

    Yes, they surely know what the are doing, at least as stock brokers. And the ones in need of luck would be them, unless they prove the graphite is suitable and of economic value.

    October 12, 2013 - 6:58 AM

    • Islay

      Goldman, could I politely suggest that it would be helpful to the discussion if you made some effort to get your facts right before posting, especially if you want to use upper case (equivalent to shouting) to further your case.

      First, I at no stage claimed that the market for Calcined petroleum coke, and Anode grade petroleum coke, totalled $17B. The current figure is, as I stated, approximately $11B.

      It is equally quite preposterous for you to claim that Calcined petroleum coke, and Anode grade petroleum coke, are derived from synthetic graphite. If you had bothered to check the prices of those materials, the absurd nature of your claims would surely have been immediately obvious – they both sell for around $500 to $600 per tonne, so producing them from synthetic graphite, worth thousands of dollars per tonne, does not sound like much of a business proposition.

      A glance at Wikipedia would have shown you that Calcined petroleum coke is material derived from oil refinery coker units, which, after firther processing in a rotary kiln produces the Calcined petroleum coke. This product can then be further processed in an anode baking oven to yield anode coke for the aluminum and steel industries.

      Further evidence of this attitude, displayed in Goldman’s post, of “Never let the facts get in the way of a good story” is provided by your dismissal of Paul Kehoe as having “no mining experience”. A glance at the publicly available information would have immediately shown that Mr Kehoe studied geosciences at university, completed a first-class honours degree in Geology, and worked for ASX listed companies in a geology role.

      If we want a reasonable, rational discussion, it needs to be based on the facts. as they are, rather than what somebody might like them to be.

      October 12, 2013 - 9:21 AM

  • Goldman

    1- yes, its 11bn, not 17bn. Its a typo. So what? sorry, but its irrelevant

    2. From Syrah, June 4, 2013

    they say flake can substitute synthetic. They cant. That was my point, they have no idea

    “As Balama is expected to have such a low cost of production and there are substantial graphite resources at Balama, Syrah has been
    identifying and analysing other large potential carbon mark
    ets. It has been shown that flake graphite can substitute into such markets. A summary of these is below:
    – Amorphous graphite and vein graphite
    – Published market size of 700,000 metric tonnes and
    US$ million per year

    Graphite electrodes (Figure 4) (usually made from synthetic graphite
    at the present time )
    – current market size over 1 million to nnes and US$ 3.5 billion per year –
    Calcined Petroleum coke-Market size of 7 million to nnes and
    US$ 4 billion per –
    Anode grade petroleum coke for the aluminium industry
    -Market size over 13 million tonnes and estimated over US$ 7 billion per year. ”

    3- Paul Kehoe has no relevant mining professional experience as a geologist in my view, according to his cv, “He has over 20 years experience in corporate finance and restructuring with firms such as pricewaterhouse and gran thomson…”he studied Geology yes, i checked it before, but he mostly worked in other areas. But if i am wrong, and he has experience in geology and mining explorers, i dont understand how they messed up with the publication of the scoping study. Unacceptable

    Anyway, all these points are kind of irrelevant to the main point we are discussing, the quality of the graphite. i see you like to twist facts, and i wont answer anymore to your posts. It is useless and time consuming. say whatever you want

    sorry everyone for my english, but i am not a native speaker and no time to review the post anyway

    October 12, 2013 - 11:15 AM

  • Dr. Copper

    As I said before, Syrah Resorces has copied the wordings of
    other graphite explorers as advances have been reported
    to suit their own story whilst their promotions has been spruiked
    by Australian Stockbroking firm, Shaw Stockbroking. furthermore
    the share price has been manipulated from inception with high
    frequent trading of free shares to Mr. Kumova and others then
    employed with Shaw as a stckbroker and later joined Syrah
    Resources as a director. Their croonies have threathened
    various stock forums owners in Australia with ligitation and
    have posters banned from telling the truth and asking the
    right questions.

    You hit the nail on its head when you asked the question, if others
    did not know of graphite’s presence whilst they were exploring for
    Uranium: Ofcourse they did, they knew very well. Here is the thing,
    so does Syrah Resources, that is why they have not reported or
    mentioned anything Uranium related on this ground, because if
    they do, they would shoot themselves in the foot.

    They wont do that before Directors have sold out of the free vendor
    shares and issued options/warrents.

    This ground is worthless because it has uranium in uneconomical
    quantities to be extracted first, that 3 step process will not attract
    any suitors nor partners.

    Outcropping is what they are looking for, now even more for the
    early outcrops and rock chips, there is no metallugical analyses
    reported regarding uranium, thats a bad sign when its well
    known the ground is a major uranium anomaly.

    In australia there is only 3 prospects worth following in this
    development order, Archer Exploration, Lincoln Minerals,
    Monax Mining, all along strike on The Eyre Peninsula, South

    Lincoln Minerals is beyond reach due to major investment
    partners, Monax Mining is dodgy too, so really the only
    one left is Archer Exploration. They dont have a supporting
    stock broking team to ramp and spruik promote them and
    its share price is heavily manipulated too, which I suspect
    is from The Syrah Triade, because Archer Exploration can
    so easily blow the bubbles of Syrah Resources to dust.

    For that, I wouldnt recommend anyone staking Archer
    Exploration because the anti-graphite brokers of Syrah
    Resources and Shaw Stockbroking will make sure its
    shareprice goes lower, just as they will maks sure
    Syrah Resources will go higher.

    Neither of it will alter the need for graphite in the future,
    it got a fantastic future for alot of companies.

    October 12, 2013 - 1:02 PM

  • Goldman

    Dr. Cooper, what do you think about the Uley mine? You did not mention it among the projects worth following

    October 12, 2013 - 3:32 PM

  • Dr. Copper

    Mega walked away from developing it further, its 10 years since
    they last produced a bag of graphite, technics today is different,
    and I have failed to find any metallurgical info, it may come around
    but I suspect a new mining lease will have be granted and with
    new todays new technics, a complete new environmental study
    would have to follow.

    October 12, 2013 - 5:40 PM

    • Tim Ainsworth

      Mega did not walk away, they simply collapsed in on their own hot air. In fact the Australian manager they appointed, Chris Darby, has been named CEO of the soon to be listed vehicle Valence. There is quite a bit of info available but I understand an updated presentation will be available shortly. As a business Uley appears to have a remarkable similarity to Flinders, and as such, a relatively quick & low cost path to market.

      October 14, 2013 - 1:04 PM

      • Dr. Copper

        Tim, correct me if wrong, but it was Mega who
        initiated the Strategic take over move of the
        Uley facility by way of raising funds via the TSX.
        Mega was responsible for the rehabilitation of
        the derelict facilitites although Strategic has
        stated its all ready to go. The facilities has been
        on care and maintainance for about 10 years
        so yes I agree there is some correlation with
        Flinders, and hot air allright.
        Mining lease and environmental studies would have to be looked at again, as well as drilling and products testings.
        From memory they produced 10,000 mts
        over a 2 year period.
        I am also waiting to see what presentation C.Darby will put out with Valence, he has
        mentioned land further north east of
        Uley, on the Eyre Peninsula. He is presenting in Australia soon.
        If you have any info on their metallurgy then
        appreciate the link. I simply cant find it.
        I guess its in line with Lincoln Minerals being
        just around the corner.

        October 14, 2013 - 1:54 PM

        • Tim Ainsworth

          9 November 2012
          On 3 October 2012 we informed the market:

          “The SER and Tarcoola boards have asked MEGA to provide a firm agreement for:

           Initial funding of approximately $5 million, to be made available to Tarcoola; and
           Further future funding for amounts sufficient to effect Tarcoola’s development plan in
          respect of the Uley mine in the short to medium term; in both cases, at a valuation that
          SER and Tarcoola believe shareholders will find reasonable. “

          MEGA has not provided a firm agreement nor any funding and this has not been rectified.
          Consequently the Merger Implementation Deed has been terminated.


          Mega could barely raise the funds for a bus fare, which really questions why mgt got involved with them in the first place.

          As previously, rather than speculate here let’s wait a few days for the presentation, I think you’ll find it considerably more advanced than your snide remarks suggest.

          October 14, 2013 - 8:34 PM

          • Dr. Copper

            Thats old news Tim, you may remember Strategic valued the deal
            at usd 70 million, for that you could buy a complete new facility, but that was hardly the reason why
            Mega balked and Tarcoola couldnt
            offer any alternatives. Thats why
            we see C. Darby trying it for Valence. I do like that those graphites on the Eyre Peninsula is
            of such superior hardness and crystallinity compared to other hardrock deposits I follow.
            So yes I wait to see what will be presentated, by whom, and how,
            C.Darby has a chance to change
            the spots on the leopard.

            October 15, 2013 - 9:10 AM

          • Tim Ainsworth

            Lol, it may be old news but it was a direct response to your “it was Mega who initiated the Strategic take over move of the Uley facility by way of raising funds via the TSX.” as Mega had little credibility then or now.
            That is also emphasised by the ridiculous $70M that you mention, but in fact it was actually far, far worse than that as Mega initially suggested a $210M enterprise value made up of $70M Uley SH’s, $70M Mega & $70M IPO. Star dust.
            Let’s just see what Chris Darby comes up with in the way of a business plan but I understand it will be far more realistic, along the lines of Flinders, and the original parent will be further diluted.

            October 16, 2013 - 10:32 AM

  • Goldman

    I have now more time than in the weekend to be precise regarding the claims from Syrah on the “Graphite Industry and Balama Marketing Update” news release on June 4, 2013.

    “As Balama is expected to have such a low cost of production and there are substantial graphite resources at
    Balama, Syrah has been identifying and analysing other large potential carbon markets. It has been shown that
    flake graphite can substitute into such markets. A summary of these is below: ”
    1. Graphite electrodes (made from synthetic graphite) – current market size over 1.5 million tonnes and US$3.5 billion per year

    NO. Syrah will not be able to sell any natural Flake graphite to this market it has been proven that Natural graphite can not replace Needle coke in making Graphite electrodes.

    2. Calcined petroleum coke – Market size of 7 million tonnes and US$4 billion per year

    What was not stated is that Calcined petroleum coke sells for much lower prices then flake graphite. (USD 200 to 400/MT) So why would Syrah want to sell into this market. We also know Natural Flake graphite can not be use as a replacement in the key markets for Calcined petroleum coke (Making Aluminum Anodes and as a reducing agent in making Tio2) Anode

    3. Anode grade petroleum coke for the aluminium industry – market size over 15 million tonnes and estimated over $8 billion tonnes per year.

    Anode coke is same as Calcined petroleum coke just another name some people refer it as since it major use is for making Aluminum Anodes

    These comments tell me Syrah does not understand the carbon market or trying to pump up the stock price.

    October 14, 2013 - 9:39 AM

  • Peter

    This is an excellent discussion, thank you. Would anyone be able to provide similar insight to the claims of Energizer Resources Molo project in Madagascar? Are there any similar concerns regarding uranium? Does it have the potential to become a producing graphite mine? Thank you in advance.

    October 23, 2013 - 12:22 PM

  • Peter

    Lol. I might have gotten a little carried away with the “million” there.

    October 25, 2013 - 5:30 PM

  • Islay

    Speaking of planning to supply the world, it is interesting to note that Syrah Resources have just announced a resource upgrade for the “Ativa Zone”, which is a small portion of the Balama deposit. The assessment, of Indicated and Inferred Resource, has more than doubled the earlier Inferred Resource for the Ativa Zone.

    Using a 20% cutoff grade (yoicks!), the Ativa resource is 30 million tonnes, at 21.8% TGC (and 0.4% V2O5). It is claimed in the announcement that this tonnage “far exceeds that of Lac Gueret and Lac Knife combined, and at a higher grade than both”.

    Because the oxidation zone extends to 60m in depth, the graphitic rocks in the zone are very friable, so that mining and milling costs are anticipated to be very low for the initial years of mining.

    This situation could put pressure on funding for prospects with costs in the mid-to-upper range.

    November 11, 2013 - 8:35 PM

    • Dr. Copper

      How come there is no extraction processes going on? none existent I notice. I told you this is Uranium ground,
      as confirmed by many others and previous owners of
      this worthless ground. That’s why Syrah have not reported any background and assay readings. They
      have been drilling their for nearly two years without
      any attempt to extract graphite. Perhaps they already
      tried but is too embarrased to state the truth ?

      Afterall the figthings is Mozambique is having all the
      majors pulliung out, SYR stays put because they are
      not a major.

      Nasty situation but plenty if Australian supposedly
      major investments houses on its bow. Bow out I say.

      Bowing. Bow Bow.

      I am the biggest poster in the World and anybody
      better look out for my spelling mistskes.

      November 12, 2013 - 11:31 AM

      • Islay

        Dr Copper’s statements to the effect that no test mining, or graphite concentration, has yet taken place at Balama, are, of course, pure nonsense.

        Formal announcements from the company (available on the ASX, or on the company website) describe ore samples going to prospective customers, the extraction of a 100 tonne sample to assess mining requirements, and the fact that samples are in the hands of metallurgical laboratories to select purification procedures. There is overwhelming evidence that test mining has taken place.

        It’s not immediately obvious why Dr Copper would want to be seen making such demonstrably ridiculous statements, but if he cares to trash his own credibility, that is his affair.

        November 13, 2013 - 9:32 PM

        • Dr. Copper

          I read their ann. and anybody who do the same can see and read that Syrah Resources hasnt produced anything on extraction from their infamous planet of graphite. There is nothing reported on the
          whole width/breath/length of any drill cores as other graphite testing exploration companies does. You want finance and total control of the graphite, well then you
          need to show transparency, and not copy
          what progress others do.

          Again you disguise and misinform, let alone miscredit others opinion, isnt it time
          you stop your denial and come to terms
          with your own truth ?

          Have you considered contacting National Geographic ? They may run a science program for you, if they will enter Mozambique.

          November 14, 2013 - 9:04 AM

          • Tim Ainsworth

            Lol, while I was attracted to the thread by the cleaning services offered below, I couldn’t but resist to ask Dr Copper for an update on his thoughts, given recent developments.
            What’s up Doc?

            March 14, 2014 - 11:00 AM

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