Elcora announces first shipment of processed graphite
On October 4, 2016, Elcora Advanced Materials Corp. (TSXV: ERA | OTCQB: ECORF), announced the first shipment of processed graphite from its Sri Lankan-based Ragedara mine. This represents a milestone achievement for the company in its quest to become a vertically integrated producer of graphite. Furthermore, now that the company is in production, it is expected that it will start to become cash flow positive in the near term.
The company is now increasing its workforce at the processing plant in an effort to ramp up production and meet demand. The company has confirmed that there is an excess of 1,000 tonnes of extracted graphite waiting to be processed. This material will be distributed by ThyssenKrupp Metallurgical Products under a ten-year distribution agreement.
Historically the Ragedara project, is a low cost, high purity producer and had a production capacity of 18,000 tpa. Ian Flint, the company’s CEO presented at the 5th Cleantech Technology Metals Summit in June this year and confirmed that the total mine cost and processing cost was $550/tonne. The expectation is that ThyssenKrupp will be able to sell this material for $1,200-1,500/tonne. The ultimate idea is to be able to refine and purify the graphene where the margins are much higher (around 130%). This cost advantage makes Elcora a strong contender in the graphene market.
While graphite demand has been quite volatile over the last year with March in particular experiencing a sharp decline in flake graphite concentrate demand resulting in global production rates falling to under 50%, over the medium term graphite demand as an anode material in lithium ion batteries may experience as much as a two-fold increase.
This forecast is driven by the needs of around 12 lithium-ion mega-factories, currently under construction which collectively will be expected to consume around 340,000 tonnes of medium-flake graphite as a feedstock for spherical material by the end of the decade.
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Lara has been an analyst for over ten years, starting her career as an equity analyst at Foord Asset Management and more recently as the ... <Read more about Lara Smith>