Critical African investment

29 April 2022 12:39

While lithium gets the headlines, the global supply of battery-grade graphite has entered a deficit this year.

The shortfall in the critical commodity required to help power a global transition to renewable energy is tracking from concerning to critical, with demand expected to rise 30 per cent annually until at least 2030.

And the US has no apparent plants or plans to supply automotive-grade graphite at scale – leaving China controlling 84 per cent of not enough carbon powder.

Enter Africa

African nations have garnered a dramatic increase in foreign investment over the past years as explorers chasing rich lands at lower costs look at the continent to make their fortune.

Madagascar – known for hosting some of the highest quality deposits globally – has been the largest provider outside China in recent times.

The Journal of African Economies noted a lack of significant changes in infrastructure and host country policies – so why now?

Australian vertically integrated graphite developer BlackEarth Minerals sees World Bank infrastructure spending in Madagascar as reinforcing the positive investment climate in many parts of the African continent.

The company is advancing a Bankable Feasibility Study into a graphite processing facility in Madagascar, eventually supplying 60,000 tonnes of premium grade product each year.

“Madagascar is an attractive investment location given its supportive fiscal and foreign ownership policies,” BlackEarth managing director Tom Revy explains.

“Even more compelling is no free carried interest and proximity to countries with strong graphite demand focus.”

Other global players agree — World Bank has made a substantial financial commitment to improve local infrastructure in Madagascar across many likely project areas.

But it’s not just graphite – Southern Africa’s mining industry has come into sharp focus for its potential in offering alternatives to mainstay commodity markets.

Revy says the investment is suitable for developing nations like Madagascar, helping to improve the standard of living with enhanced transport routes and local infrastructure.

“Projects like ours in Madagascar will further elevate its reputation as a preferred location for foreign investors,” he points out.

“Madagascar stands to benefit from significant forecast growth in graphite demand.

“It is, in effect, a win-win situation with all stakeholders likely to benefit over the coming years and decades.”

“With global attention focused on decarbonisation, graphite is regarded as a critical commodity and key to delivering a global solution to climate change.”

BEM’s Australian Stock Exchange-listed share price has risen 4.17 per cent today, trading at 12.5c (11:04 am UTC+ 8 hours).


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