Vancouver-based Ceylon Graphite (TSX-V:CYL) has inked a purchase and distribution agreement with GES Europe GmbH.
GES Europe specialises in the manufacture, trade, and processing of synthetic and natural graphite.
The distribution agreement gives GES preferred pricing free-on-board shipped from the Colombo Port in Sri Lanka and guaranteed supply if certain volume thresholds are maintained for an initial period of 12 months.
The agreement provides certain distribution exclusivity within Europe but does not restrict Ceylon from any other direct sales or agreements.
Ceylon explores for and mines graphite from its 121km2 land package in Sri Lanka which hosts vein graphite deposits. These deposits currently make up less than 1% of the world graphite production, according to Ceylon.
The company says its exploration grids represent the majority of known historic graphite resources in Sri Lanka.
Ceylon adds graphite mined in Sri Lanka is known to be some of the highest grade in the world and has been confirmed as suitable to be easily upgradable for a range of applications including the high-growth electric vehicle and battery storage markets as well as construction, healthcare and paints and coatings sectors.
CEO Sasha Jacob says demand for non-Chinese supply is at an “historic high” following China’s introduction of export restrictions and the US increasing its tariff on Chinese graphite to 25%.
Benchmark Mineral Intelligence forecasts the natural flake graphite market will shift to a deficit from 2025, with demand from the electric vehicle battery market to grow at a compound annual rate of 17.5% over the next decade. By 2040 the market is expected to be short around 5.5 million tonnes.
The anodes of EV batteries require around 50-100kg of graphite, which makes up nearly 100% of the anode and accounts for about 25-28% of the total EV battery. There is around 10-15 times more graphite than lithium in an EV battery. A Tesla Model S, for example, requires 71kg.
GES Europe CEO Benjamin Sarkozy says Ceylon’s graphite has “uniquely high natural carbon characteristics that exceed those of any other natural graphite suppliers” the company has seen.
“The extremely high graphite grade, low environmental footprint and superior performance characteristics are tremendously beneficial to our customers,” Sarkozy says.
“Our clients cover the range from battery manufacturers to construction materials and defence industry applications.”
GES expects the range of products using Ceylon graphite to include, among others, 95%+ C direct ship graphite as well as thermally purified 99% C grade.
Write to Angela East at Mining.com.au
Images: Ceylon Graphite
