Kibaran signs graphite supply agreement with Japanese major

JOHANNESBURG (miningweekly.com) – ASX-listed Kibaran Resources has signed a binding exclusivity agreement with Japanese commodities trading giant Sojitz for the supply of graphite concentrate produced at its Epanko project, in Tanzania.

Under the agreement, Kibaran will be the sole supplier of Tanzanian graphite to Sojitz for distribution into markets including Japan, Korea and Taiwan. Sojitz, in turn, is a major supplier of raw material and products to the rapidly growing lithium battery industry.

The initial term of the agreement is five years and provides the framework for sales of a minimum of 14 000 t/y of natural flake graphite products subject to terms and conditions. Under the existing design, the Epanko plant will be capable of producing 44 000 t/y of flake graphite concentrate.

Kibaran already has binding agreements for 30 000 t, including 20 000 t with German industrial giant ThyssenKrupp.

Kibaran MD Andrew Spinks said in a statement on Monday that the company’s relationship with Sojitz would also provide a platform to increase production capacity at Epanko as market demand increased for battery grade graphite.

The execution of the agreement follows the completion of extensive due diligence by Sojitz, including a global review of potential graphite suppliers to meet the increasing demand from the lithium battery industry.

The due diligence focused on analysis of the Epanko mine’s graphite quality, including extensive testwork by end users.

The Sojitz agreement provides an avenue for long-term sales of Epanko graphite into the fast-growing lithium-ion battery markets of Japan and Korea. Sojitz will also market Epanko graphite for use in a range of key applications in Japan, Korea, Taiwan, China and the US.

Spinks added that Kibaran expected to formalise further strategic alliances to tie down the remaining major supply portals outside China.

“Kibaran is now studying the potential to increase Epanko’s production capacity based on forecast growth in lithium battery demand. Graphite demand is forecast to treble on the back of the lithium battery demand and Kibaran’s relationship with Sojitz and the ability to expand Epanko’s capacity means it will be ideally positioned to capitalise on this opportunity.”

Kibaran is also advancing its plan to produce battery-grade graphite and other value-adding strategies through the development of a downstream processing plant.

Sojitz intends to use its network to play a role in developing the downstream battery-grade graphite processing plant.