Alabama Graphite to supply U.S. buyer with Ultra-PMG
2017-10-10 11:02 ET - News Release
Ms. Ann-Marie Pamplin reports
ALABAMA GRAPHITE ANNOUNCES LETTER OF INTENT (LOI) TO SUPPLY BATTERY-READY GRAPHITE PRODUCTS TO U.S. LEAD-ACID BATTERY MANUFACTURER
Alabama Graphite Corp. has executed a letter of intent (LOI) with an established United States-based lead-acid battery manufacturer to supply high-purity, natural flake premium purified micronized graphite (PMG) product -- marketed under the trade name Ultra-PMG -- and delaminated expanded graphite (DEXDG) conductivity enhancement materials for applications in the negative electrodes of advanced lead-acid battery systems. The identity of the buyer, which has been in business for more than 50 years, is being withheld for reasons of commercial confidentiality. The buyer became interested in engaging with AGC after reviewing the company's Sept. 21, 2017, announcement, entitled, "Alabama Graphite receives positive evaluation results for Ultra-PMG product from RSR Technologies; improved dynamic charge acceptance (DCA) by 194 per cent." For more information on AGC's DEXDG, please refer to the March 28, 2017, announcement, entitled, "Independent test results: Alabama Graphite Corp. succeeds in producing high performance conductivity-enhancement graphite for lithium-ion batteries." A material evaluation/qualification program utilizing AGC's battery-ready graphite products in the buyer's lead-acid batteries is currently under way. The testing involves:
-Expander* composition reformulation;
-Electrode/battery fabrication;
-Short-term cycling at varying depth of discharge (DOD);
-Long-term cycling at varying DOD.
* Note: Expanders are an essential component of the negative plates of lead-acid batteries and increase the surface area and stabilize the structure of the negative active material.
The LOI calls for AGC to supply an estimated 10 tonnes per year of both Ultra-PMG and premium, proprietary DEXDG conductivity enhancement materials to the buyer, commencing in 2018 for the buyer's forthcoming proprietary pilot line of fast-charge automotive and stationary batteries. The buyer will be ramping up to full-scale production of this particular battery line in 2020 and expects to require larger quantities of AGC's graphite products. The specific terms of the LOI, including pricing and renewal rights, are confidential for competitive reasons. The company intends to advance the LOI into a formalized offtake/supply agreement in the coming months.
Chief executive officer Donald Baxter commented: "As evidenced by today's announcement, battery companies are taking notice of AGC and its battery-ready technical developments, in addition to our potential sourced-in-USA benefits to potential customers. To date, AGC has entered into 30 non-disclosure agreements (NDAs) with potential end-users, several with household names -- 14 with U.S. Department of Defense (DoD) battery manufacturers/contractors -- of which, to date, evaluation samples have been sent to 23 potential end-users. Lead-acid batteries represent a mature, reliable and cost-effective battery technology, which is still the dominant battery technology in the world. Lead-acid batteries are currently the dominant technology for stationary-storage applications. They have been in use for more than 150 years, and are ubiquitous and well understood. Every vehicle outfitted with an internal combustion engine, nearly every train, aircraft, backup power-supply plant, and many other market segments use, and will continue using, lead-acid batteries. The dynamics and the philosophy of this battery market segment is appealing to AGC's long-term market strategy. It is a great component in our battery-product mix.
"I want to underscore that although quite small in amount, this current LOI is for just one of the buyer's valve-regulated lead-acid (VRLA) battery products. Discussions are under way regarding the buyer's starting, lighting and ignition (SLI) batteries, which could hold considerable potential opportunities for AGC with battery manufacturers, in addition to start/stop (SS) batteries, and both absorbent glass mat (AGM) and enhanced flooded batteries (EFB) for vehicles with idle start-stop (ISS) functionality," stated Mr. Baxter. "We are currently in advanced-stage discussions for offtake/supply agreements with two other U.S.-based end-users and are diligently working towards LOIs for significant quantities of our premium, American-sourced-and-manufactured graphite products."
Natural crystalline flake graphite of high purity and conductivity is a new and improved additive to the composition of an ingredient of negative plates (the expander) in lead-acid batteries. Traditionally, the expander is represented by a homogenized co-processed composite of barium sulphate, carbon black and ligna sulphonate. The latter is a byproduct of the paper-making industry, an inconsistent and impure additive. In the recent years, the lead-acid battery industry has been actively investigating the replacement of ligna sulphonate for purified forms of natural crystalline flake graphite, a much purer and electrically conductive component. The expander makes up approximately two total percentage by weight of the negative plate in a lead-acid battery. Its functions include: the enhancement of cold cranking performance of lead-acid batteries, an additive, which helps with elimination of assembly mistakes during production of lead acid batteries, among others. Major improvements in battery-pulsed cycle life have been reported by lead-acid battery producers, which altered the formulation of expander in terms of substituting ligna sulphonate for graphite. Initial independent test results for AGC's Ultra-PMG and DEXDG battery-ready graphite products indicate outstanding performance for this substantial market.
Readers are cautioned that AGC is not yet in production and there is no guarantee that the company will advance to full-scale production. If, following the completion of a feasibility study, which has not yet been commenced, AGC is able to advance the Coosa graphite project into production, the resulting graphite would be sourced from within the contiguous United States of America.
This LOI was completed in the absence of a feasibility study and there is no certainty the above objectives will be met.
Qualified person
Donald K. D. Baxter, PEng, president, chief executive officer and executive director of Alabama Graphite, is a qualified person as defined by National Instrument 43-101 guidelines, and has reviewed and approved the content of this news release.
About Alabama Graphite Corp.
Alabama Graphite is a Canadian-based flake graphite exploration and development company as well as an aspiring battery materials production and technology company. The company operates through its wholly owned subsidiary, Alabama Graphite Company Inc. (a company registered in the state of Alabama). With an advancing flake graphite project in the United States of America, Alabama Graphite intends to become a reliable, long-term U.S. supplier of specialty high-purity graphite products. A highly experienced team leads the company with more than 100 years of combined graphite mining, graphite processing, specialty graphite products and applications, and graphite sales experience.
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