Renascor Resources has fast-tracked development of massive deposit yielding high-grade graphite concentrates at a cost low enough to compete anywhere in the world.

Renascor’s graphite future is looking good

Australia could be two years away from becoming home to one of the world’s largest graphite mines.

Adelaide-based junior miner Renascor Resources has had a big boost towards its plans to turn Australia’s biggest graphite resource into a producing mine by 2021 after a European governmental agency earmarked substantial financial support.

Renascor Resources, which has a market capitalisation of around AU$23 million, has received in principle support from The Netherlands’ Export Credit Agency for up to 60 per cent of an estimated AU$108 million capital expenditure to build its initial graphite production facility.

The Siviour mine site, which will be built near Arno Bay in South Australia’s Eyre Peninsula, has the potential to provide significant royalties and export revenues for South Australia’s economy.

More than 100 jobs are expected to be created during construction, with an additional 100 jobs expected during operation.

The Government of The Netherlands’ Export Credit Agency, known as Atradius, has issued a Letter of Interest confirming in principle project finance support for Siviour.

Atradius’ support in part results from Renascor’s strategic engineering partnership with Royal IHC, a major Dutch EPC contractor with significant expertise in mining projects.

Backing from the European government agency, which seeks to promote Dutch exports, provides the potential for Renascor to secure favourable debt arrangements to build a processing facility for its planned Siviour mine site.

Renascor Managing Director, David Christensen sees the development as a potential game-changer, giving Renascor much greater access to the debt markets and enabling the Company to accelerate its financing plan.

“One of the greatest challenges facing graphite development companies is putting together secure financing. We believe that Atradius’ support may provide Renascor with a credible finance solution to permit Renascor to transition from development into mining,” said Mr Christensen.

Siviour is developing with surprising speed, given the resource was delineated just three years ago.

Siviour is Australia’s biggest graphite deposit and one of the largest reported graphite deposits in the world.

Renascor Resources also recently announced a Mineral Lease had been granted by the South Australian Minister for Energy and Mining.

“Although Siviour is a relatively recent discovery, it’s not that far away from Final Investment Decision, and we could be producing graphite as early as 2021,” continued Mr Christensen.

About 20 per cent of the world’s graphite goes into new energy lithium-ion batteries, which offers lucrative opportunities in an expanding field.

Flake graphite fetches between US$600 a tonne and US$1800 a tonne, depending on size and purity. Spherical graphite, refined from flake, fetches around US$3600 a tonne.

Renascor is also considering a spherical graphite refinery. This was confirmed by positive data released, as part of its Prefeasibility Study (PFS) earlier this year.

MoU with Chenyang

On the heels of the funding boost, Renascor has signed its first Memorandum of Understanding (MOU) with China’s Qingdao Chenyang Graphite (Chenyang) to provide graphite concentrates from its Siviour Graphite project.

The MOU provides for the supply of graphite concentrates from Siviour in accordance with Renascor’s proposed staged development of Siviour, as contemplated by the Siviour Prefeasibility Study.

During Stage 1, in which Renascor’s estimated annual production is 22,800t per year, Renascor would supply Chenyang with up 10,000t of graphite concentrates per year.

During Stage 2, in which Renascor’s annual production increases to 156,000t per year, the supply to Chenyang would increase to up to 30,000t per year.

The MOU also contemplates cooperation between Chenyang and Renascor to establish pilot plant production at Chenyang’s facilities, as well as collaboration for the supply of advanced products from Siviour graphite.

The MOU resulted after a series of meetings with Chenyang organised by Mastermines, Renascor’s Asia marketing advisor.

Commenting on the agreement with Chenyang, Mastermines Director David Gillam sees the MoU as no surprise that an Australian graphite resource such as Siviour would be welcomed by Chinese processors.

“Sivour’s low cost and safe jurisdiction mark it as unique in graphite developments worldwide and it has been welcomed by the Chinese market.”

*Article published in the July-September 2019 issue of The Asia Miner