Wednesday, January 11th, 2023
Graphite, nickel and copper developer Blencowe Resources has received approval from the Ugandan Ministry of Energy and Mineral Development to export materials from its Orom-Cross graphite project to China-based Jilin Huiyang New Material Technology Company (JHNMTC) to enable final bulk metallurgical test work to be undertaken this year.
The export permits for 100 t of bulk raw ore materials and 400 ℓ of local groundwater, which will enable Blencowe to export a representative bulk sample from the initial five years of production. This will be used to assess the metallurgical processes on a commercial scale, including differing plant components to increase the grade, recovery and flake sizing from Orom-Cross.
The addition of the groundwater sample will enable the test facilities to assess the water characteristics in terms of the reagents required under proposed site operating conditions.
Blencowe mandated JHNMTC to complete this test work in their existing pilot plant facility, which negates the requirement for it to build its own bulk testing facility on-site in the near term.
Ugandan mining law does not allow for the export of unprocessed raw materials.
Blencowe executive chairperson Cameron Pearce says China is currently the most mature graphite market, and that entering into an offtake relationship there would be “very valuable” to the company, given the “highly attractive” economics at Orom-Cross.
The project has a net present value of $482-million, based on an initial 14-year mine life, with only 2% of the resource having been drilled thus far.
The miner also commissioned the test work as a key step in the process to prequalify Orom-Cross end-products as concentrates through to original equipment manufacturers to ultimately achieve binding offtake contracts for production from the project.
JHNMTC has over 30 years of direct experience in graphite processing and has completed similar bulk sample testing for other leading international graphite companies in the past.
Works to excavate and transport the bulk samples have already started and will be freighted by sea to China to have the testing completed as quickly as practically possible.
In addition, 150 kg of the same samples will be air-freighted to the same JHNMTC facility more quickly to undergo metallurgical testing and build knowledge before the larger samples arrive.
Blencowe has already been able to share significant data with JHNMTC, having previously completed two stages of bench scale metallurgical testing of a 30 kg sample with SGS in Canada.
More recently a further round of testing of a 130 kg sample was undertaken through a small pilot plant in Perth, Australia.
This next-level proposed test in China, using their existing infrastructure and experience, will be done on a considerably larger scale, which will give all parties more knowledge of the end concentrates that can be produced on a production scale from Orom-Cross.
Blencowe hopes that this testing programme will initially lead to non-binding memoranda of understanding for offtake, and ultimately to binding sale agreements for a substantial portion of the initial 50 000 t/y product to be produced from Stage 1 within Orom-Cross.
“This bulk sample trial is significant as a precursor that ultimately leads us to a full offtake agreement, which in turn would enable us to kickstart production with a critical mass of product sold to drive profitability and cash flow,” he adds.
There may also be potential for engineering, procurement and construction, and funding contracts emanating from this relationship, potentially providing one solution to Blencowe’s capital requirement for initial stage production.
The graphite market, says Pearce, is evolving quickly and Blencowe will see a lot of change ahead as the world expands from its current makeup of between 15-million to 20-million electric vehicles (EVs), towards the targeted 100-million by 2030.
“This, in turn, will drive up the demand for flake graphite as a non-replaceable input required to produce lithium-ion batteries to power these EVs and leading analysts forecast a 300% rise in world demand for graphite by 2030,” he says.
Pearce adds that the graphite market is already experiencing a rise in prices in anticipation of this looming shortage.
“The Chinese graphite market remains the largest and will likely remain so for some time ahead, thus establishing a strong and commercial relationship with both Chinese and other Asian partners is decisive for Orom-Cross and a natural progression for [Blencowe],” he concludes.