The long-term binding commercial agreement between the parties is for the sale of approximately 35,000t/y of SuperFlake graphite concentrate from NextSource's Molo mine in Madagascar. The term of the agreement is 10 years with an automatic five-year extension. The product will be for the refractory and expandable graphite (graphite foil) markets for sale in, but not limited to, Europe, the UK, North America, Mexico, China and South Korea; SuperFlake is a registered trademark in key jurisdictions.
NextSource announced in November 2015 that independent testing by various third-party end users of flake graphite confirmed that its SuperFlake graphite meets or exceeds quality requirements for all major end-markets for natural flake graphite. According to the company, SuperFlake graphite concentrate can achieve 98% carbon purity with simple flotation, has excellent thermal expansion, can be easily upgraded to 99.97% purity (battery grade), contains no deleterious substances and has high crystallinity.
The company added that SuperFlake graphite concentrate has excellent flake size distribution that is well above the global average, with 46.4% being classified as +80 (large), +65 (extra large) and +48 (jumbo) mesh in flake size. Specifically, 23.6% of SuperFlake graphite concentrate is +48 mesh and greater in size.
NextSource will enter into production in phases and utilise an all-modular build approach to construct the Molo graphite mine, which is targeting commercial production by April 2022. In March, NextSource appointed Erudite Strategies as engineering, procurement and construction management (EPMC) contractor for Molo.
Initial production during Phase 1 is expected to be approximately 17,000t/y over the first two years of production, followed by a significant expansion in production planned in year three to match market demand.
As a result, the requested offtake sales volumes by thyssenkrupp will be phased: during Phase 1 it will be for a minimum of 7,300t/y, with commissioning targeted in April 2022; up to 35,000t/y will be available in Phase 2, with targeted production by the second quarter of 2024. The initial tonnage volume will be used by thyssenkrupp to verify run-of-mill production of SuperFlake, which will then trigger the much larger volume expansion of 35,000t/y requested.
Wolfgang Schnittker, CEO of thyssenkrupp Materials Trading, commented: "The trustful cooperation with NextSource enables us to further expand our strong presence in the international foundry and refractories industry. It is our unique selling point to competitively serve various industries but especially emerging industries and their highly specified requirements."
Craig Scherba, president and CEO of NextSource Materials, said: "This executed offtake agreement for the sale of our SuperFlake graphite was the culmination of a multi-year process and is yet another significant milestone in the company's strategy in becoming a graphite producer of consequence. We are extremely pleased to formalise this partnership with thyssenkrupp given their expertise, scale, and extensive global distribution network. We look forward to expanding our relationship together as we organically expand our graphite market share over the years to come."
Jörg Glebe, chief operating officer of thyssenkrupp Materials Trading who is responsible for the minerals business, added: "The partnership with NextSource underlines the consistent continuation of our activities to expand our high-quality graphite supply sources outside of China. In particular, the distribution range of the graphite flakes enables us to supply our customers even more in accordance with their needs and to support them in their long-term growth plans."
