BlackEarth's India JV

BlackEarth Minerals’ joint venture acquires graphite development site in India

BlackEarth Minerals (ASX:BEM) reports that its joint venture (JV) with India-based downstream producer Metachem Manufacturing has acquired a development site in the Pune region of India.

BlackEarth reports the JV has appointed local engineers to oversee the development of the plant, which is a ‘significant milestone’ in the JV’s development and the partners are committed to fast-tracking development of the plant.

As part of the acquisition, the JV’s plan is to develop a plant that can produce, in the initial stages, 2,000-2,500 tonnes per annum of expandable graphite then expand production capacity to 4,000-5,000tpa.

The cost of the development, including land, building and all capex is scheduled to be US$3 million (stage one) with gross revenue projected to be US$7 million in the first full year of production. It is expected to grow to US$18-$20.5 million per annum following plant expansion.

the JV operation is a low capex business that will be established in a Special Economic Zone

Prospective flake graphite producer BlackEarth reports that, among other aspects, the JV operation is a low capex business that will be established in a Special Economic Zone (SEZ) in India. BlackEarth has committed to funding 50% of and initial concentrate acquisition and other start-up costs.

Also, BlackEarth announces that the JV has secured a license agreement with the JV operators for the forecast life of operations, and it is proposed that graphite concentrate will be sourced from external parties for years the first two years operation with product from its flagship Maniry Project in Madagascar supplying operations from the years onwards.

BlackEarth also completed a feasibility study to assess the robust commercial terms and all other factors relevant to the JV and a final investment decision has been approved by the board.

Metachem has been producing expandable graphite and supplying products into the global market for a number of decades. The company has a strong business model which provides a degree of commercial security to the JV.

The BlackEarth team will manage the marketing and sales of product produced utilising their strong logistics and global marketing network.

Amid the COVID-19 crisis, the global market for expanded graphite estimated at US$203 million in the year 2020, is projected to reach a revised size of US$352 million by 2027, growing at a CAGR of 8.2% over the period.

The expanded graphite market in the US is estimated at US$55Million in the year 2020. China, the world’s second-largest economy, is forecast to reach a projected market size of US$80 million by the year 2027 trailing a CAGR of 12.3% over the analysis period 2020-27.

Images: BlackEarth Minerals Ltd
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Written By Adam Orlando Editor-in-Chief Adam Orlando has more than 20 years’ experience in the media having held senior roles at various publications, including as Asia-Pacific Sector Head (Mining) at global newswire Acuris (formerly Mergermarket). Orlando has worked in newsrooms around the world including Hong Kong, Singapore, London, and Sydney.