Tuesday, October 14, 2014

Flinders to sell up to 50,000 tonnes of flake graphite over 10 years to industrial behemoth

Flinders Resources (CVE:FDR) has signed a letter of intent to sell up to 50,000 tonnes of its flake graphite over the next 10 years to industrial conglomerate ThyssenKrupp, with options to increase this as required in the future. The news follows the offical re-opening of the historical mine in September. The preliminary deal is for between 20,000 to 50,000 tonnes of flake graphite from Flinders' Woxna mine in Sweden, to be sold to ThyssenKrupp Metallurgical Products, a daughter company of industrial giant ThyssenKrupp. The company said the flake graphite specifications are in line with its Woxna graphite products, and will allow the increase of production rates to meet this, and future, demand. The 10-year agreement calls for the supply of 2,000 to 5,000 tonnes of flake graphite concentrate per year, with the products to be fine, medium and large flake graphite. Flinders did not disclose in its statement specifics such as price, transport, or product specifications under the agreement. "I am very pleased to announce this first significant agreement as it is the result of our marketing efforts over the past year and is a major step in growing our business," said president and chief executive officer, Blair Way. "As a prominent producer in Europe, Flinders is well positioned in the graphite sector, with the ability to fill consumer needs and provide a sustainable European alternative to Chinese supply." Indeed, Woxna is forecast to deliver premium large or extra-large flake graphite—the type of graphite used in lithium-ion batteries --- with 88% to 95% purity over a period of 13 years, at an estimated rate of 16,600 tonnes per year based on the preliminary economic assessment. The goal is to target traditional markets for now, including steel-making and refractories, the lion’s share of the current graphite market in Europe, with Flinders aiming to capture up to 20 percent of the European graphite market. Woxna is a historic mine that initially began operations in 1996, but production was halted just five years later due to falling graphite prices. The company’s next step at Woxna is to grow its customer base, with customers currently on site to confirm Flinders’ capabilities and discuss expanded supply contracts. The current resource has the ability to easily support some 30,000 tonnes of flake graphite per year, which could ultimately become necessary given the anticipated surge in demand for graphite driven by the electric vehicle market. Currently, Woxna’s plant is permitted for up to 11,000 tonnes per year of production with current capacity of 15,000 tonnes per year, which can be expanded should it be required without any expected difficulties. The mine is strategically located in a gateway to the EU graphite market, being as it is a three and a half hour drive north of Stockholm, and less than a two-day drive to most customers in Europe. Flinders is planning to recreate its success at Woxna with the past producing El Tejon project in Mexico, which is owned by Big North Graphite (CVE:NRT), a graphite company Flinders is currently in the process of acquiring.



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