With global demand for graphite expected to triple by 2020, the carbon material is certainly hot property.
The main driver of demand is lithium-ion batteries, which are used in the burgeoning electric vehicle industry, but which also has growing use in consumer electronic devices as well as applications with renewable energy and grid storage.
But the increased uses for graphite come with a few caveats on the supply front.
China dominates current supply at 70% of the market. Brazil contributes 15% with Canada and India supplying 5% apiece.
The graphite market needs secure supply. While there are substantial emerging large-scale graphite developments in Africa, the sovereign risk there was highlighted by new mining laws in Tanzania that give the government free-carried equity interests and further authority to renegotiate mining concessions.
The new Tanzanian laws – and continuing political uncertainty in Mozambique, which is also a graphite province – highlight Australia’s low sovereign risk.
And this is where our Siviour deposit in South Australia comes in.
Discovered only last year, Siviour is a world-class deposit in terms of size, quality and cost.
It is the world’s ninth largest indicated graphite resource and the largest JORC-compliant resource in Australia.
Siviour weighs in at 80.6 million tonnes of ore at a grade of 7.9% total graphitic carbon (TGC) for 6.4 million tonnes of contained graphite.
Moreover, the deposit’s flat laying orientation underpins a low cost of production.
According to the scoping study, Siviour could produce at a cash cost of $450 (US$333) a tonne, one of the lowest costs of production of any graphite development globally and the lowest of any reported development outside of Africa.
With the low cost of production and spending $55 million a year, the payback period is estimated at only 1.7 years.
The location in South Australia – on the Eyre Peninsula, roughly between Whyalla and Port Lincoln – comes into its own, with a stable political environment, skilled workforce, access to established infrastructure and proximity to established industrial centres for advanced processing.
It’s no coincidence that Tesla’s Elon Musk has announced plans to build the world’s biggest battery in South Australia.
And with metallurgical results confirming Siviour’s potential to produce high-quality, high-purity graphite concentrates for sale into the lithium-ion battery sector and other high-growth market segments, it’s a market we’re looking forward to joining too.