EcoGraf, POSCO International ink non-binding anode development agreement

Australian graphite producer EcoGraf has entered into a non-binding cooperation agreement with POSCO international (Posco) for the development of an integrated anode supply chain which would cover flake graphite mining to downstream anode production

The two companies made definitive arrangements for the sale and purchase of EcoGraf’s battery anode material for an initial term of ten years from the commencement of production of said material.

Presently, no further details regarding the effective date of the agreement or purchase prices are available.

EcoGraf’s supply of anode materials to Posco is expected to reach 7,500-12,500 tonnes in the first year, which will increase to 12,500 -20,000 tonnes per year from the second to the fifth year and 20,000-40,000 tonnes per year from the sixth to the tenth, the company said.

Aside from the sale and procurement of anode materials, the two companies will collaborate on the development of a supply chain which would span from upstream graphite mining to downstream application. This includes the development and expansion of the Epanko and Merelani-Arusha graphite projects in Tanzania.

Additionally, there will be cooperation in terms of spherical graphite production and hydrofluoric acid free purification of the spherical graphite produced.

“EcoGraf’s breakthrough recovery of battery anode material using its EcoGraf™ purification process will enable battery supply chain customers to reduce their [carbon dioxide] emissions and lower battery costs,” the company said.

The non-binding arrangement with EcoGraf marks another move by Posco to diversify its supply chain of anode raw materials in regions outside of China in recent years.

The agreement is also in line with the current global trend of supply chain localization in regions outside of China, which has been brought to the forefront following disruptions caused by Covid-19 and other geopolitical factors such as the United States’ Inflation Reduction Act

Fastmarkets’ price assessment for graphite flake 94% C, -100 mesh, fob China was $670-715 per tonne on Thursday May 25, down by 0.36% from the week prior.

The price of -194 flake fines has dropped by 16.57% since the start of the year amid slow demand in downstream new energy vehicles sector.

Meanwhile, the price of graphite spherical 99.95% C, 15 microns, fob China has dropped by 18.87% within the same period to $2,000-2,300 per tonne, on May 25, the lowest level since Fastmarkets started to price the material in March 2012.

On May 30, another Tanzanian graphite company, Black Rock Mining, agreed a binding offtake deal with Posco, including a prepayment of $10 million, to feed the South Korean conglomerate’s growing anode business.

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