Signs MOU With Leading Battery Anode Manufacturer
Renascor Resources Limited (ASX: RNU) has signed a second MOU for production of Purified Spherical Graphite (PSG) from its planned Battery Anode Material operation in South Australia.
The MOU provides for the supply of up to 10,000tpa of PSG over a period of 10 years to Zeto, which represents approximately one- third of Renascor’s planned annual PSG production capacity of 28,000tpa.
The MOU with Zeto is non-binding and provides the framework for further negotiations in relation to price, product quality and other offtake parameters following completion of additional product validation tests.
Zeto is one of the largest anode producers globally, with current anode production capacity of 30,000tpa. Zeto is currently constructing an additional 20,000tpa of anode capacity, with the expansion to 50,000tpa capacity planned for 2022.
Renascor Managing Director, David Christensen, said Zeto is major supplier of natural flake graphite anodes and is active in research and development of anode technologies. Zeto is the first producer of silicon-carbon anode material in China.
Zeto supplies anodes to some of the world’s largest battery makers such as BYD Co. Ltd., whose electric vehicle battery production capacity of 25GWh in 2018 is planned to expand to over 90GWh by 2028. BYD Co. Ltd. Is listed on the Hong Kong Stock Exchange, is part owned by Warren Buffet’s Berkshire Hathaway and has a current market capitalisation of approximately US$100 billion.
“Our MOU with Zeto is a further significant step in Renascor’s plans to become a globally competitive Australian producer of battery anode material. Together with our recent offtake MOU with Minguang New Material, these two offtakers will account for up to two-thirds of our planned PSG production,” Mr Christensen said.
“We are particularly pleased to have secured our second PSG offtake agreement with an anode material company affiliated with one of the most technically adept anode technology developers and producers in China, and one who is steeped in the production of natural flake graphite anodes, as well as emerging silicon-composite anodes.
“China continues to dominate anode production globally, with production capacity of over 600,000tpa, and this makes China the largest PSG consumer in the world. China’s current anode production represents around 85% of global anode production, and with another 560,000tpa of capacity currently under construction, representing over 90% of all new capacity, we expect China to remain a dominant market for PSG into the future.
“The demand for electric vehicle batteries continues to underpin growing demand for PSG. We are seeing increasing interest from anode makers for our Siviour PSG, and we expect this to assist in securing additional offtake commitments in line with our financing and development strategy.”
Mr Christensen said Renascor is concurrently advancing offtake negotiations for the balance of its planned PSG production capacity, including with anode manufacturers and lithium-ion battery companies headquartered in Northeast Asia and Europe.
While COVID-19 has caused some delays by preventing site visits and in-person meetings, Renascor continues to make progress in relation to PSG offtake, with current activities largely focused on undertaking PSG validation tests, responding to due diligence enquiries and negotiating potential offtake terms.
