Evion Group NL (ASX:EVG) has made material progress in achieving its goal of signing binding offtake agreements for the majority of graphite produced from the Maniry Project in Madagascar.
The project is forecast to produce some 39,000 tonnes per annum of graphite concentrate for Stage 1 of development, moving to 55,000 tonnes per annum in Stage 2.
So far, the company has agreements covering about 60% of expected graphite production.
Some 50% of graphite concentrate has been budgeted for a Battery Anode Material (BAM) Plant Evion proposes to build in Europe in partnership with Urbix
A further 10% will feed the company’s expandable graphite joint venture in India.
Read: Evion Group will collaborate with leading battery anode material developer to assess European plant
Evion expects to sign offtake agreements with third parties for a further 20-30% of Maniry’s graphite concentres, especially given a forecast surge in demand from the lithium-ion industry.
Lithium-ion rechargeable batteries contain more graphite than lithium, nickel, and cobalt by volume.
This strengthening outlook is leading to growing requests for Maniry bulk samples for testing by leading users, which are seeking to secure more non-Chinese graphite to manufacture BAM.
Strong positioning for project funding
Evion managing director Tom Revy said the high percentage of product covered by binding offtake contracts would significantly strengthen the company's position as it moved to finalise project funding for Maniry.
"A high degree of binding offtake agreements will enable us to conduct funding discussions autonomously from sales arrangements," Revy said.
"This will in turn help ensure we secure favourable funding terms because we will be able to demonstrate secure, reliable revenue streams and we will not have to tie any funding offer to offtake.
“The growing requests for bulk samples come as Evion moves to complete the Environmental and Social Impact Assessment (ESIA) for Maniry.
“The ESIA, which is on track for completion in the June quarter of this year, is a pre-requisite for securing the project's final permits and licences.
"Maniry is the cornerstone of Evion's strategy to be a vertically integrated supplier of graphite products for use in lithium batteries and other purposes.
"Our timing is ideal given that we are moving into the funding and development stages as the market for graphite is set to gain momentum.
"The growing interest in our product among BAM producers reflects this pivotal phase in the graphite market and we are moving quickly to capitalise on it."
Revy has been actively engaged with World Bank Officials and the Mines Minister in Madagascar to secure licensing and infrastructure commitments in the short term.
BAM partner Urbix also recently signed a joint venture agreement with leading battery manufacturer SK On, South Korea, to enable SK On to supply leading care manufacturers, Ford, Hyundai and Volkswagen (ETR:VOWG_p).