Following significant testing on their graphite to confirm its high-quality specifications, BlackEarth Minerals (ASX: BEM) has secured a Tier 1 offtake partner with top European refractory company RHI Magnesita (LSE: RHIM) entering a binding agreement to purchase BlackEarth’s graphite.
The Memorandum of Understanding will see BlackEarth work closely with RHIM to produce “tailor-made” graphite concentrate products that will be used for various refractory products and materials.
“This Binding Memorandum of Understanding with RHIM is a testament to the quality of BlackEarth’s graphite from the Maniry project,” said BlackEarth Managing Director, Tom Revy.
“Although our discussions have taken some time, working with tier 1 players in the global graphite industry such as RHIM, provides a significant opportunity for BlackEarth, as we continue to fast track the Maniry graphite project towards first cash flow.”
“We look forward to developing a longterm relationship with RHIM and working collaboratively with their team to produce customised graphite products, which meet their specifications to supply the needs of the market”.
As one of the world’s largest producers of refractory products, RHIM trades on the London Stock Exchange with a market cap around ￡1.3 billion and are firmly entrenched in the FTSE250. With 35 production facilities around the world, RHIM’s refractory products are crucial to the production of steel, cement and glass where graphite is the core ingredient thanks to its extremely high melting point and low density.
Final commercial terms are yet to be confirmed however, BlackEarth sits on a valuable resource in Southern Madagascar where they have rapidly developed their Maniry Graphite Project.
Since listing on the ASX in 2018, BlackEarth has fast tracked the project to complete their Bankable Feasibility Study in less than 2 years, spending under $6 million. Within studies completed, the Maniry Project has been identified to have high-quality natural graphite suitable for lithium-ion battery production, and a Net Present Value (10% pre-tax) of USD $103 million over a 10-year Project Life.
Madagascar has been mining and exporting graphite for over 100 years and is considered one of the safest African nations for mining according to the 2018 Mining Journal World Risk Report.