Plumbago name revived in new High Purity Graphite project in Sri Lanka
Plumbago was, in the formative years of modern chemistry, a popular name for graphite. The word comes from the Latin ‘plumbum’, meaning lead (plumbago itself means ‘acts like lead’), owing to its resemblance to lead. This may explain why pencils are still said to have a ‘lead’ core, even if it is, in fact, graphite. Most natural graphite, until recently, has largely been mined in China; however, there are high grade and rich resources of the mineral in North America, parts of Africa and Europe. However, one of the finest types of graphite has been produced in Sri Lanka for centuries. Indeed, Ceylon, as Sri Lanka used to be called, was one of the main suppliers of graphite to the British Empire during its Victorian heyday, when known graphite sources in Great Britain itself (Cumberland) became exhausted. In London, graphite, or plumbago, was used to make crucibles and melting pots thanks to its high non-combustible properties.
The term, or name, Plumbago and its Sri Lankan legacy has recently been revived by an emerging player in the graphite world. Plumbago Refining Corp. B.V. (‘Plumbago’, or the “Company”) has acquired full ownership of its Sri Lankan subsidiary, Sarcon Development Ltd. (‘Sarcon’) which has been developing various graphite mines throughout Sri Lanka. Plumbago, which is registered in the Dutch Caribbean territory of Curacao is not yet listed in any public exchange, has fully acquired Sarcon and will be in charge of developing a graphite project in Sri Lanka. The project has already received technical backing from Sri Lanka’s Geological Survey and Mines Bureau, which will get 5% of the value of the processed graphite. Sarcon has already obtained exclusive exploration rights for 106.1 km2 grids in Western and Southwestern Sri Lanka, which are said to include “all known graphite resources on public land in Sri Lanka other than the two producing mines…that were successful until they discontinued operations in the early 1900’s”. Plumbago is targeting a production of 350 tons of graphite a month, processing it in Sri Lanka itself and export finished value-added goods (possibly lubricants) with an initial investment of USD$ 15.2 million.
Plumbago, through Sarcon, will work closely with the Sri Lankan Geological Survey and Mines Bureau (GSMB) to survey and evaluate some 20 former graphite mines throughout Sri Lanka, to establish those where production might be revived most easily. The GSMB studies have so far yielded favorable results, which suggest that the Company’s production targets could be achieved promptly. The graphite being targeted is exclusively of the ‘vein’ variety, characterized by grades of 90% C/+80 mesh quality or higher. This allows for lower CapEx and OpEx costs. The mining areas under considerations, moreover, are located next to some of Sri Lanka’s most productive graphite properties such as the Bogala mine operated by the German Graphit Kropfmuhl AG,specializing inthe production of natural crystalline graphite, which is especially sought to make lubricants.
Graphite has attracted many investors’ attention lately because it is a crucial substance for the advancement of several key technological sectors from electronics and batteries to aerospace and industrial metallurgy. Graphite is also the base from which graphene, the new wonder material is derived; because of this association, many investors might consider graphite to be a niche material with a niche market. This is very far from the reality, whereby annual demand for graphite is in excess of 1.1 million tons or – based on average prices ranging from USD$ 1,300 to 2,200 per ton, depending on purity and type – means graphite generates revenues of around USD$ 2.5 billion annually. Graphite’s high technology applications can sometimes obscure the fact that graphite has other and more ‘pedestrian’ applications that are also very important, especially in the emerging industrial sectors of south Asian economies.
Sri Lankan graphite, moreover, has seen strong international and domestic demand for its graphite based lubricants. Sri Lanka itself has experienced an average GDP growth rate of over 6% from 2003 until 2012, reaching a peak in 2010 of 8.6 Percent in December of 2010. Sri Lanka, moreover, is known as one of the few producers of vein graphite, which is indeed also known as Sri Lankan Graphite, because of its rarity in other parts of the world. The Sri Lankan government is very interested in promoting foreign private sector investment and it is taking steps to ease the bureaucratic process in order to attract more foreign investment. Graphite is one of Sri Lanka’s most important mineral products.
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