Despite short-term graphite price fluctuations continued electric vehicle uptake will drive graphite demand growth creating the need for increased global graphite production, therefore ASX-listed Sovereign Metals’ Malingunde saprolite-hosted graphite project in Malawi has my attention this week.
Greater capacity batteries, such as those required for electric vehicles, are expected to drive significant and growing demand for natural flake graphite over the coming years.
The lithium-ion (Li-ion) battery sector in particular is the fastest growing market for flake graphite. Flake graphite is spheronised and carbon coated to construct Li-ion battery anodes.
Sustainability targets and legislation, consumer demands, and more affordable electric vehicles are driving increased demand for lithium-ion batteries, which some countries, the UK for example, having legislated that petrol and diesel cars will not be sold after 2030.
Following the completion of a pre-feasibility study on Malingunde in 2018, which demonstrated strong economics for flake graphite production and showed the project is at the very bottom of the global graphite cost curve, Sovereign Metals has decided to advance its 100%-owned extensive portfolio of graphite deposits in Malawi (including Malingunde) in parallel with its world-class rutile projects.
Malingunde’s mining licence application process is well underway with the environmental and social impact assessment (ESIA) now nearing completion.
Sovereign has demonstrated the ability to produce a range of premium-quality products from Malingunde. Spherical graphite with suitable benchmark specifications for lithium-ion battery anodes can be produced from Malingunde concentrates, providing the potential to sell into the rapidly growing lithium-ion battery markets.
The results highlighted a compelling opportunity for entry into the developing Li-ion battery supply chain, providing attractive future value upside for the company, as new graphite supply will be required to meet the strong demand growth for Li-ion batteries in the future.
The company’s natural graphite and rutile projects in Malawi meet many of the key ESG objectives and sustainability criteria set by the investment community and major governments around the world. Both minerals are hosted in soft and friable, free-dig saprolite leading to considerably lower carbon footprint in mining and beneficiation compared to hard-rock mines and synthetic products.
Additionally, both graphite and rutile have significant further downstream benefits in terms of carbon reduction with natural graphite being a major input for Li-ion batteries used in the booming EV market and natural rutile able to displace carbon, energy and waste intensive synthetic rutile and titanium slag in pigment production.
Sovereign Metals is therefore considering strategic options relating to provision of graphite products for battery anode production to capture the anode value chain by advancing its graphite projects in parallel with its world-class rutile projects.
Various down-stream test-work programmes are planned, enabling it to be positioned to provide new graphite supply to meet the strong demand for Li-ion batteries required for a sustainable future.