Volt Resources Ltd (ASX:VRC) has struck an offtake deal with a Chinese company for the sale of 12,000 tonnes per annum of coarse flake graphite product, increasing to 90,000 tonnes annually from the Bunyu Graphite Project in Tanzania for a term of five years.
Offtake deal with extension option
The offtake agreement was made between Volt subsidiary Volt Graphite Tanzania Plc and Qingdao Baixing Graphite Co Ltd, based in Qingdao, China.
Qingdao Baixing Graphite is an established producer of graphite products for a range of applications.
The current agreement means that all proposed Stage 1 Bunyu coarse graphite product has now been sold.
Stage 2 Bunyu coarse flake graphite product is sold for the final three years of the offtake agreement.
If the parties agree, this offtake deal may be extended for a further five years.
Consumption set to increase
“Qingdao Baixing is extremely pleased to enter into this binding offtake agreement for the supply of coarse graphite from the Bunyu Graphite project,” Qingdao Baixing Graphite president Feng Yu Peng said.
“Our annual graphite consumption is set to increase dramatically in the near future and the Bunyu project will meet our needs.”
Volt chairman Asimwe Kabunga said: “We are very pleased to secure this significant binding sales agreement for our Bunyu coarse flake product, and we are delighted to be partnering with such a highly respected company such as Qingdao Baixing Graphite.
“This second binding offtake agreement is a strong validation of the confidence in Volt’s Bunyu Graphite project and Volt looks forwards to a long and successful relationship with Qingdao Baixing Graphite.”
Graphite sold out
“Combined with our recently announced binding offtake agreement for fine flake graphite with Graphex Group, we have now sold out the Stage 1 Bunyu graphite product,” Volt CEO Prashant Chintawar said.
“Our focus now is to finalise ongoing funding discussions so we can develop the Bunyu project and start generating revenues.
“Industry graphite market experts project coarse graphite prices to be over US$1,150 per tonne in 2025 and this binding offtake is a large revenue driver for us.”
The Stage 2 Bunyu expansion is scheduled to start production roughly two years after the commissioning and ramp-up of Stage 1.
The company has now wrapped up a pre-feasibility study (PFS) for Bunyu, incorporating production of around 170,000 tonnes of graphite products annually.
About Qingdao Baixing Graphite
Established in 1985, Qingdao Baixing Graphite manufactures more than 50,000 tonnes of diversified graphite products annually, making it one of the largest producers in China.
Products include high-purity and spectrum graphite, micronised graphite, expandable graphite, graphite sheets, graphite rolls and more.
The company produces graphite products with more than 300 specifications. The products have been sold to more than 500 companies in 28 regions in China, and more than 15 countries including Japan, Korea, Europe and America.
Baixing will increase its production and trading capacity as the market expands in future years.