BlackEarth Minerals signs key offtake deal with leading Europe-based graphite processor, shares jump

BlackEarth Minerals NL (ASX:BEM) has signed an offtake and sales agreement with leading Austria-based graphite processor Grafitbergbau Kaisersberg GmbH to sell up to 2,500 tonnes per annum of expandable graphite worth around US$7.5 million. This agreement is set to begin as soon as the proposed BlackEarth/Metachem expandable graphite plant development is completed. The deal, which represents an endorsement of Metachem’s product quality as well as the proposed supply of expandable graphite, has been facilitated by BlackEarth’s sales and marketing partner in Europe, LuxCarbon. It is intended to be the first of several planned offtake and supply agreements. Shares have jumped more than 17% at the opening to 11.5 cents. “Enormous boost” to planned JV Managing director Tom Revy said: “This agreement provides an enormous boost to our planned JV with Metachem and the development of our plant in the leading graphite processing location of India. “By making this commitment to buy our product in the future, Grafitbergbau has shown enormous confidence in BlackEarth/Metachem and not only is this an endorsement of the expandable graphite produced by Metachem and what is proposed, the agreement also ensures we now have commitments in advance for our future production in India. “The agreement also assists to underpin our proposed plant development in Madagascar, as concentrate from this development will be provided to our downstream operations with Metachem as soon as this is available. “Our partners in Germany, LuxCarbon, have been instrumental in creating this offtake opportunity for us and we’re excited to be dealing with Grafitbergbau, a company that is one of the largest buyers and developers of expandable graphite products in Europe.” BlackEarth is well-positioned for expansion with a projected cash position at June 30, 2021, of around A$6.7 million. Solution-oriented graphite company Over the last 50 years, Grafitbergbau has developed into a globally active, customer and solution-oriented graphite company. The company has focused on the development of new applications over the past 30 years in cooperation with customers, universities, and international research institutions. As a result of this, Grafitbergbau has created high-quality graphite downstream and niche products for the national and international markets and has become a leading supplier to Tier 1 companies in Europe and Internationally. Grafitbergbau uses its developed and enhanced products for fire-resistant applications, radiation controls, and a variety of other downstream uses and implementation into the EV and alternative energy markets. Application of expandable graphite Around 35% of expandable graphite production is processed into fire retardants. This is the single biggest end-market for expandable graphite. The remaining product is processed into flexible graphite which is the precursor to a number of end products such as graphite foils for use in the automotive, EV and alternative energy sectors. Rapid demand growth is also forecast due to the increasing use of high energy density batteries in mobile devices. The global expandable graphite market is expected to grow from US$202.8 million in 2020 to around US$351.9 million by 2027. Such growth and demand for a range of products and applications provides BlackEarth with an enormous opportunity.