Elcora Advanced Materials moves towards the manufacturing of engineered graphite products
The Manufacturing of engineered graphite anodes for use in current production lithium ion batteries used in the transportation sector is about to commence in North America. Elcora Advanced Materials Corp. (TSXV: ERA | OTCQB: ECORF) will be the integrator for the project. The products will be made using spheronized micrographite provided by Elcora Advanced Materials and produced for Elcora by an American environmentally approved contract processing company from Elcora supplied graphite from multiple sources including the company’s own mining operations. The sourcing of the graphite will be managed by a global trading partner with a century of experience. The manufacturing of the final anodes will be undertaken in the USA by an American company with technology provided in part by an experienced American manufacturing engineering company. The global trading company partner will market the anode graphite under the Elcora Advanced Materials’ name.
To meet the demand of the initial business Elcora has commissioned the construction of a 2000 tonne per annum engineered graphite anode paste plant at a North American location. This will be followed by a ramp up to 20,000 tonnes per annum capacity, 10% of projected North American annual demand by 2019.
This business model of Elcora’s, acting as a production product integrator for the best (economic) use of a natural resource is a watershed moment in the development of graphite marketing. This model is the state of the art version of vertical integration.
Let me briefly explain why Elcora is not just another graphite “junior.” First of all it is not by any means a junior, an exploration company with the purpose to bring a natural resource deposit into production as a mine. Elcora is a “mining” company; its company operated mine in Sri Lanka produces and sells very high grade “natural” graphite.
Elcora is what modern business describes as an “integrator;” it selects and manages all of the components of a supply chain necessary to produce a specific product in order to deliver that product into the market at the highest profit point(s) for those aspects of the supply chain that the company itself controls. The U.S. Department of Defense famously uses the integrator approach to manage its acquisition of the complex weapon delivery systems (ships and aircraft) it purchases. On a more mundane level the assemblers of automobiles have more and more become integrators of the 6,000 individual components that in their combination become an automobile at the integrator’s assembly plant.
In pursuit of further production of integrated products Elcora has opened and is operating a 10 gram per day demonstration “laboratory” in Halifax, Nova Scotia, producing graphene. When the natural graphite from Elcora’s Sri Lankan mining operation was tested at by Professor Antonio Neto, Director of the 2D Materials Center at the National University of Singapore it was rated as one of the two best in the world with respect to its conversion ratio of total carbon to graphene. The material being produced in Halifax, Nova Scotia, is now available to qualified researchers in industry, academia, and government. Elcora’s focus is on graphene as a modifier for future lithium ion battery anodes. Canada’s premier and world famous battery research center is at nearby Dalhousie University, and Elcora looks forward to working with the University on commercializing graphene..
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I recently (two weeks ago) gave a presentation in China to a lithium graphite conference attended by both Chinese and non-Chinese lithium and graphite juniors, miners, processors, and battery component as well as battery manufacturers. I was presenting on behalf of Elcora Advanced Materials.
I was surprised by the one-dimensionality of most of the presentations by juniors. The graphite juniors talked only of their flake type and size or of their plans to purify their graphite for battery electrode use. The lithium juniors talked only of brines vs hard rock minerals and processes to speed up the very long times needed in any case to extract and separate lithium. Neither the lithium nor the graphite juniors spoke of active supply chain management or integration management to give projections of positive cash flow and profit.
The presentation slide below is a good summary of the current plan and operations of Elcora Advanced Materials: North America’s benchmark producer of engineered graphite for mass produced components of both consumer and military products.
Elcora Advanced Materials operates in the here and now; it is already part of the future of the lithium ion battery industry.
Jack Lifton is the Sr. Editor for InvestorIntel Corp. and is the CEO for Jack Lifton, LLC. He is also a consultant, author, and lecturer ... <Read more about Jack Lifton>