Evion Group NL (ASX:EVG, OTC:EVIGF) made a site visit at its expandable graphite joint venture (JV) project site in India, after the final stages of commissioning were completed over the last week with production now underway.
Construction of all infrastructure on site is complete, with inbuilt capability to double production capacity over the next few years.
Production on-site officially commenced within the last few days, with testing of all equipment to continue over a ramp-up period of about 1 to 2 months.
Once planned increases to production capacity are complete, the JV is positioned to become one of the world’s largest producers of expandable graphite outside of China, supply markets in Europe, Southeast Asia and the US.
Well timed production
The beginning of production at EVG’s JV project coincides with a projected global shortage of expandable graphite, following China’s ban on export of graphite materials.
China historically produces about 65% of the world’s graphite, representing the single largest producer in the world.
Following the ban, overseas sales fell 91% month-on-month. The ban is likely to result in a substantial increase in demand at competitive prices.
"We are now likely to see a disruption in supply chains and sharp increase in graphite prices. And this comes after prices had dropped to an 11-year low, down over 50% year on year during June 2023. So the potential for a powerful bounce in the prices for graphite off oversold levels is high,” Nicoya Research founder Jason Hamlin said.
“Over the longer term, natural graphite and active anode material (AAM) demand is expected to increase four and eight times, respectively, over the next 10 years.”
Evion says the JV has assembled a highly experienced management and operation staff onsite at the project, supported by its own sales and marketing team.
Discussions have already begun with several potential new buyers in Southeast Asia, Japan and other markets.