The key focus of Walkabout Resources Ltd (ASX:WKT) during the June quarter was finalising the commissioning of all sections of the processing plant at its Lindo Jumbo Graphite Mine in Tanzania.
“The Lindi Jumbo Graphite Mine continues to go from strength to strength, with our commissioning and operational teams working extensively on optimising plant performance and availability; in addition to seeking innovative means to reduce running costs of an already low-cost operation,” Walkabout managing director and CEO Andrew Cunningham said.
“In tandem with these efforts, fulfilling trial orders and growing our ore stockpiles will further position the Lindi Jumbo Graphite Mine move to operational break-even during the ramp-up period.”
Coming to market at fortuitous time
Coarse flake graphite, which will make up around 88% of Lindi Jumbo expected revenue, has not been as impacted by recent supply pressures impacting fine flake graphite producers. There is little to no product substitution possible from synthetic graphite in Lindi Jumbo coarse flake graphite end users’ applications.
Coarse flake pricing remains lower than the long-term average but, in recent months, there has been a firming in both Chinese and global pricing for larger flakes.
As state priorities in China are focused on fine flake production, less coarse flake is available for the many industrial applications outside of battery anodes. A result of the significant price decline in small flakes, some mines in China have been slow to resume production after the winter shutdown this year.
With this, production of large flakes also declined despite large flake prices having been stable or in some instances rising. It is against this supply pressure that Walkabout seeks to place the coarse flake product from its Lindi Jumbo Graphite Mine.
The natural graphite produced at Lindi Jumbo provides customers with alternative supply produced outside China and can also support battery makers in meeting US Inflation Reduction Act and the EU Critical Raw Materials Act obligations. China also remains an important source of new demand, as a recent net importer of coarse flake graphite.
In May, the US Government announced a 25% tariff on Chinese natural graphite, adding to concerns around the security of existing supply chains, after China imposed export restrictions for graphite.
Walkabout notes an apparent widening gap between Chinese domestic and ex-China prices, which has been reflected in sales orders received to date. The company states, that given this backdrop, “Lindi Jumbo production is coming to market at a fortuitous time and remains poised to benefit from resulting price increases”.
June quarter activities
The company outlined the priority focus of the operating and commissioning teams during the quarter as being:
- Increasing plant availability and utilisation.
- Identifying equipment and/or design issues and rectifying these where necessary.
- Verifying and improving the integration between plant equipment and control systems.
- Ensuring a stable feed through the entire processing circuit and increasing throughput (tonnes).
- Commissioning and operability of the Tailings Storage Facility (TSF), including water-balance optimisation, which is needed for continuous operations.
Walkabout says once throughput targets have been met, the team will turn its attention to the end-to-end optimisation of processing circuits. This will enable concentrate production to reflect best-available product grade, size and quality outputs.
Final concentrate purity has been above 92% TGC from the outset and up to 95% TGC during certain runs during the quarter. Recoveries to date have been around 87%. This is in line with the recoveries used in the DFS and well above the targeted recoveries in the ramp-up schedule.
During the June quarter, around 70% of production was fine product (-80 mesh) as the commissioning priorities were on throughput and purity. Reprocessing of stagnant or spilt concentrate from frequent stoppages during plant commissioning resulted in some overprocessing.
The company says that during July, longer periods of plant availability and minor alterations to the grinding circuit and attritioning mills were introduced to better retain the larger graphite flake, such that fines are now the minority of product. It expects to make further improvements over the coming months to capture the maximum of the insitu flake distribution.
Looking ahead
Walkabout outlined the priorities of Lindi Jumbo for the current Q3, which include:
- Progressively increasing throughput whilst increasing process consistency, ensuring product quality/grade and maximising flake size retention as per the production ramp-up schedule;
- Ramping up production rates to be consistently at the 40,000 tonnes per annum market capacity;
- Assessing opportunities to produce and sell additional quantities of graphite from the >20% of builtin excess capacity in the Lindi Jumbo plant.
The ramp-up of the processing plant at Lindi Jumbo will focus on increasing throughput to the 40,000 tonnes per annum market capacity, safely and sustainably, by optimising plant availability and utilisation, optimising the various processing circuits of the plant to achieve final product specifications as per the pilot scale test regimes and design of the plant.
Walkabout is aiming for Lindi Jumbo to be the producer of choice for high-grade, high-quality, large-flake graphite concentrate, so it will need to ensure that all its products meet the specification requirements for regular customers.
While future expansion of production to take advantage of the more than 20% excess capacity of the plant once fully ramped up is possible, any such decision will depend on sufficient market demand to accommodate additional supply.
The markets for the four sized graphite products of Lindi Jumbo are unique and experience different growth profiles. The company notes that the majority of its production of larger flake products, may not see the sizable demand growth as for its fine flake products.