As another year ticks over the demand for electric vehicles and batteries continues to skyrocket, and one Australia-Kazakh mining company has a bountiful resource it believes will be crucial in meeting it.
A recent report from McKinsey found that Europe alone will need to increase its EV charging capacity by a staggering 807% in the next decade.
Immediate thoughts go to lithium but graphite is an essential element in the batteries that are powering this revolution.
Enter Sarytogan Graphite Ltd (ASX:SGA), an ASX mining small cap that wholly owns its namesake Sarytogan Graphite Project in the Karaganda region of central Kazakhstan.
In this article
- The big headline
- Geologist at heart
- Sarytogan graphite project potential
The initial numbers, which were released as part of the company’s successful $8.5 million IPO back in July, make for impressive reading.
The project contains a gigantic, high-grade inferred mineral resource of 209 million tonnes at 28.5% total graphitic carbon (TGC).
“It is quite remarkable,” Gregory tells Proactive. “It’s typically triple the size and triple the grade of most other graphite projects, which is a great place to start for any mining project.”
The potential of the project is backed up by the growing demand for graphite, which has many uses, notably in anodes, one of the two electrodes in batteries.
“Benchmark Mineral Intelligence forecasts the graphite market to have remarkable growth between now and 2035, with 97 new graphite mines to be required to meet the demand,” Gregory says.
“When you look around the world you’d be lucky to find a dozen graphite mines that are likely to move into production, so there is a shortfall.
“Our project is so large that we think that we can help to meet a significant part of this demand. It’s early days, and there are other companies further advanced than we are, but none with a resource as large as ours, so we plan to be a fast follower.”
Geologist at heart
Gregory’s excitement over the project is well-founded, given his success in the industry over more than two decades.
His CV includes heavy hitters like BHP (ASX:BHP), Murchison and Mineral Resources, and he has led small-cap miners like Great Southern, Barra Resources and Kogi Iron.
“I’m a geologist and began my career in the iron ore industry, being lucky enough to be involved as it was taking off in the early part of this century,” Gregory says.
“After iron ore came the battery revolution and I was involved in lithium mine developments throughout this time.
“I really enjoy taking these exploration assets into production. That’s the fun bit. That’s where the geologist can play an important role in bringing all the disciplines together.
“There’s a sense of achievement for every mine development I’ve been involved in, working with hundreds of people, doing the mental gymnastics of trying to put the jigsaw puzzle together.
“And this is what excites me about Sarytogan, the potential of our resource, and being able to work on a project that is focused on creating a better future.”
Sarytogan graphite project potential
Aside from the headlines, Gregory points out that there are plenty of reasons for investors to be excited about this 209 million tonnes resource in central Kazakhstan.
And governments north of the equator agree. Earlier this month, as part of COP27, the EU and Kazakhstan signed an agreement on raw materials, batteries and renewable hydrogen.
The agreement focuses on the development of a secure and sustainable supply of raw materials and refined materials, renewable hydrogen and battery value chains, and contributes to the green and digital transformation, according to the Astana Times.
Prime Minister Alikhan Smailov said the country had all the necessary attractiveness factors for European business, including diversified energy sources and high transit-transport potential.
“The EU remains one of Kazakhstan’s largest and most significant trade partners, accounting for about 30 per cent of the country’s foreign trade.
“At the same time, today we see significant potential for building investment cooperation and increasing mutual trade.”
“It’s a positive development,” Gregory says. “We really see the Sarytogan project as a tremendous opportunity, being located in a very friendly mining jurisdiction halfway between China and Europe, the world’s largest battery markets.”
And the company is starting to gain traction in the market: last month its shares shot up after another round of exceptional drilling results.
That was followed by another share price run in early December, after 'breakthrough' 99.87% graphite purity was achieved by its German laboratory partners through flotation, alkali roasting and chemical purification.
“Our giant high-grade mineral resource is now complemented by our premium micro-crystalline high-purity product, credentials that now elevate the project to be a potential answer to the world’s projected battery anode material shortage,” Gregory says.
“The drilling has now been completed on schedule and budget and we are on track for a mineral resource upgrade in Q1 2023.
"This together with the metallurgical test-work optimisation underway in Germany and Australia will inform a scoping study planned for 2023.”
- by Daniel Paproth