BlackEarth Minerals (ASX: BEM) has announced the signing of a graphite supply and marketing agreement with German-based Luxcarbon GmbH, world leaders in the procurement, supply, and marketing of graphite concentrate and downstream graphite products.
Luxcarbon is currently one of Germany’s major suppliers of Graphite and Carbon products to top tier suppliers of Volkswagen, Mercedes, Ford, and to major chemical corporations.
The three-year deal allows BEM to secure the supply of up to 25,000t of high-grade product to meet growing demand from EV manufacturers and related industries that require expanded and purified graphite products.
Terms of agreement with Luxcarbon
BlackEarth Minerals said that under the terms of the Agreement, Luxcarbon will source and supply to BlackEarth up to the amount of 25,000mt pa of high-grade concentrate, with the graphite supplied from world-class operations known to the BEM executive team.
The agreement also states that Luxcarbon shall exclusively market and sell BEM and BEM JV produced material into the European markets to well-known and defined end users. BEM said that its focus will be on the initial supply of downstream products for use in the rapidly expanding EV and battery market.
The marketing and sales component of the Agreement states that Luxcarbon will sell up to 25,000mt pa of BEM and BEM JV produced product.
BEM said that the terms of the Agreement are for 3 years with the ability for the parties to extend this by mutual consent.
MOA with Urbix Inc
BEM had signed a memorandum of understanding with American company Urbix Inc. on 5 February 2021 for the supply of graphite concentrate for its operations in the USA.
The deal with Luxcarbon now allows BEM to secure a supply of world-class graphite concentrate that can be supplied to Urbix’s operations in the USA.
Development of Madagascar project
BlackEarth reported that the current supply arrangement with Luxcarbon will continue whilst the company fast tracks the development of its high-grade, large scale graphite properties in Madagascar, which will then form a regular supply to its proposed downstream graphite operations.
BEM said that Luxcarbon will also provide technical advisory services to BlackEarth on the production of downstream products from the Company’s proposed facilities in Australia and/or Madagascar.
Opportunity for exponential growth
According to a new World Bank Report, graphite output will need to jump by nearly 500 percent by 2050 to meet the demand for energy storage and use.
BEM expressed confidence that the European demand will continue to grow exponentially and offer unique supply opportunities in the short and long term.
In 2019, EV sales in Europe had increased by 44 percent, the highest rate since 2016. The EU’s new emissions standard—95 grams of carbon dioxide per kilometer for passenger cars—is expected to boost EV sales because it stipulates that 95 percent of the fleet must meet this standard in 2020 and 100 percent in 2021.
BlackEarth reported that Luxcarbon will work closely with the BEM Executive team to further develop supply chain, logistics, and sales channels for their downstream graphite production into the expanding EV and Battery markets.