Australian-based graphite company, Renascor Resources has released its Definitive Feasibility Study (DFS) for the company’s Siviour Graphite Project near Arno Bay on South Australia’s Eyre Peninsula.
|Renascor’s Siviour operations, South Australia|
The Definitive Feasibility Study confirmed Siviour as one of the world’s leading graphite projects, both in terms of the tier-one quality of the Resource and the projected low operating costs.
Renascor’s Managing Director David Christensen stated that this was a significant milestone for the company and the project.
“Since beginning work on the DFS, we have aimed to deliver a project that would remain profitable through the highs and lows of the graphite market supply-demand cycle.
“At AU$471 (or US$330) operating costs per tonne of graphite concentrate produced during the first 10 years, Siviour will be located in the lowest quartile of the cost curve for international graphite projects,” commented Mr Christensen.
Over this same 10-year period, the company anticipates that graphite produced at Siviour will achieve an average price of AU$1,259 (or US$881) per tonne based on independent forecasting.
“We are confident that the DFS demonstrates the robust economics of Siviour, not only over the initial 10-year period, but also over the 40-year life of mine,” explained Mr Christensen.
“The Siviour Graphite Project, which is 100 per cent-owned by Renascor, is poised to create an important industry for the Eyre Peninsula and the economy of South Australia, with hundreds of jobs created during construction and operation. We also expect the majority of the personnel will be hired from local communities.”
The operation is planned to be built in two stages. Stage 1 will produce an average of 80ktpa of graphite concentrate for this first four years, before expanding to Stage 2, which will see production increase to 144ktpa.
In parallel, Renascor intends to advance its downstream spherical graphite production strategy, with a view to adding further value to the project by developing a downstream operation in South Australia to supply the growing lithium-ion battery industry.
Mr Christensen sees the long-term outlook for graphite remaining strong, with independent market research showing a future supply deficit driven by the growth in electric vehicles.
“Electric cars are powered by energy stored in lithium-ion batteries, which contain critical components that are made from graphite,” said Mr Christensen.
“The projected growth in electric vehicles continues to suggest that very soon there will be a significant shortage in the graphite needed to supply this industry. Benchmark Mineral Intelligence has projected the world’s use of graphite for electric vehicles could expand from its current size of around 200,000 tonnes per annum to over 1,000,000 tonnes per annum by 2025, and over 2,000,000 tonnes per annum by 2028.
“Current and future supply of graphite is forecasted to be sourced largely from China and Africa. Renascor is well placed to provide a globally competitive and secure alternative, based on Siviour’s low projected operating cost and our location in a highly industrialised, low sovereign risk jurisdiction.”
With the DFS now complete, Renascor will turn its attention to ramping up efforts to secure binding offtake agreements and debt and equity funding, while in parallel advancing its downstream spherical graphite production strategy.
“Our Siviour project is now well advanced, and we aim to secure binding offtake agreements, particularly within the lithium-ion battery supply chain. Just as rubber is needed for tyres, graphite is a raw commodity required for anodes in batteries in electric vehicles. This mine will provide a product that literally drives innovative renewable technologies.”