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BlackEarth flows downstream

7 September 2022 12:02
ASX: BEM

BlackEarth Minerals have commenced a scoping survey to confirm the commercial viability of constructing a battery anode manufacturing plant to process materials from its Maniry graphite project in Madagascar.

It is a bold first step in a strategy to become a major industry supplier in the lithium-ion battery and electric vehicle markets.

If constructed, the plant would account for 40 per cent of the Maniry project’s total graphite production, processing raw graphite fines into spheronised and purified graphite in a significant value-add.

The company originally planned to sell raw graphite fines to processors, but with European demand for lithium batteries flying, preliminary studies demonstrate a processed product selling for nearly four times the original.

The company said the strategy was designed to provide valuable income diversity and increased overall financial returns.

“We believe there is an exceptional opportunity to become a vital supplier to the lithium battery industry by processing Maniry fines into BAM,” managing director Tom Revy said.

“By becoming vertically integrated in this manner, we stand to substantially increase our revenues, margins and free cash flow while becoming an integral part of the booming lithium battery industry in Europe.”

The company expects the Maniry definitive feasibility study to be complete by the end of next month while proceeding as planned to process coarse graphite through its Indian JV for sale of expandable graphite next year.

BEM’s Australian Stock Exchange-listed share price has risen 9.2 per cent today, currently selling at trading at 9.5c today (11:29 am UTC+8 hours).

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