Interesting interview. Applies to zen and CCB.
mining.com
junior mining companies assume it will be easy to sell out their full graphite output once it is mined and produced.
New graphite mines will most likely have to sell at below-market prices to entice end-users to change suppliers.
There are high-grade mines that have a high percentage of graphite; that's a good starting point. However, if the costs to move the overburden and get the ore to the flotation plant are higher than those of a company with a lower-percentage ore, that can cancel out the cost benefit of a high-grade resource.
The second factor is the footprint of the graphite ore after the flotation is done. In other words, what percentage of the graphite ore is in the plus-50 mesh, minus-50-by-80 mesh and minus-80 mesh sizes? What purity level can be obtained through normal flotation, without chemical treatments that add cost? That will help determine the average selling price. Price vs purity.
Most companies making lithium-ion battery anode material are using the lowest cost graphite, that being the minus-80 mesh in a typical carbon of 94–96%.
Hypothetically, if I produce 40,000 ton/year (40 Ktpa) of 98-carbon graphite, I would need to assess what the demand is for 98-carbon graphite. I might determine that global demand is 20 Ktpa. In that case, I would have to get 100% of the market to sell 50% of my output. I would then have to sell the rest at 96-carbon prices, to sell the other 50% of my output. The net result is, it will lower my average selling price to sell all the volume because there is not a big enough market for 98-carbon graphite. Am I selling all output at premium pricing?
Is it realistic for junior companies to cultivate a new set of end markets now?
SR: I don't think it's realistic, no. To justify its existence, a junior mining company has to look at the traditional markets. It takes too long to cultivate new markets and you can't justify the investment.
There are two kinds of graphene. One is made from chemical vapor deposition, in which you make a graphene coating on top of another substrate, then remove the substrate, leaving only the graphene. Most of the graphene being used today is made that way. That is the graphene the electronic industry wants, because it's ultra-high purity and can be easily controlled. The lower-cost way to make graphene uses natural graphite as the precursor. That market will take longer to develop, but it will be a bigger market because that kind of graphene can be used in the more practical, higher-volume products that we use every day.
Cheers
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