Agreement With Leading Indian Graphite Specialist Metachem
BlackEarth Minerals NL (ASX:BEM) and India’s Metachem have signed an Operational JV agreement, to commence plant construction and the production of Expandable Graphite.
Planning has commenced on site selection, executive recruitment and scheduling for other logistics and development matters.
Key elements of the JV are:
1. BlackEarth are to source, in conjunction with their Sales and Marketing partner LuxCarbon, high quality graphite concentrate for treatment for the new expandable graphite plant
2. Following completion of its own plant, BlackEarth will provide large and jumbo flake graphite to the JV
3. Each JV partner proposes a 50/50 equity and profit share arrangement with CAPEX estimated to be US$3.0 – 3.5m in total
4. BlackEarth and LuxCarbon to provide end user and product technical advice to the Metachem operational team
5. BlackEarth will manage sales, marketing and the growth of sales worldwide.
6. Estimated initial production to be 2,000 – 2,500tpa growing to 4,000tpa, with plans to materially grow production
7. BlackEarth estimates Gross JV Revenue of A$9.0m pa in the first year, growing to ~A$17m – upon production ramp up to 4,000t pa
8. Production sites have been identified and appropriate economic, social and environmental conditions have initially been assessed as highly favourable. A decision on a preferred site within the Indian Special Economic Zone (“SEZ”) will be concluded in the short term
9. Company names and branding is currently being prepared with a detailed announcement due in the short term.
“The signing of this JV is an exciting development in the growth of our company. To form this JV with a world leader of Expandable Graphite production is a wonderful outcome and this event follows many months of discussions between the executive teams our two companies,” BlackEarth Managing Director, Tom Revy, said.
“Now that we have signed off on this JV, we will shortly move to our preferred site in India and also conclude the recruitment of senior executives in India to manage the planning, construction and development phase. Having an offtake partner prepared to buy all initial production has also given us confidence to move forward with plant expansion plans so that we can increase production and sales over the medium term, whilst minimising operational risk.
“With first year sales projected to be almost A$9m for the JV, we expect to start receiving a steady and strong cash flow during 2022 which will also contribute to the planned development of our Maniry site in Madagascar; consistent with our initial fast-track to cash flow strategy.”
Metachem is an Indian based private Company that has been in operations since the 1980’s. The Company has a number of divisions and is a producer of Expandable Graphite with graphite concentrate sourced from India and also Madagascar.
Metachem also produce a range of downstream graphite processed products and these are supplied in to the Indian domestic market. For over 20 years, Metachem has been exporting Expandable Graphite to Europe and also the USA.
This agreement with BlackEarth presents Metachem with an opportunity to not only secure a reliable supply of high quality, large flake graphite concentrate but also benefit from BlackEarth’s marketing and supply arrangement with LuxCarbon in Europe. Metachem management and technical staff are experienced in the production of a range of graphite downstream products and their industry knowledge and market share is well recognised within India and Internationally.
For further information please visit: https://www.blackearthminerals.com.au/