BlackEarth Minerals Inks JV Agreement to Produce Expandable Graphite

THE BOURSE WHISPERER: BlackEarth Minerals (ASX: BEM) has struck an Operational JV agreement with India-based private company Metachem.

BlackEarth Minerals informed the ASX the JV with Metacheman is determined to commence plant construction and the production of Expandable Graphite with planning already underway on site selection, executive recruitment and scheduling for other logistics and development matters.

The JV has eyes on the expandable graphite market, which it said is expected to grow in demand as fire retardant material and for further downstream use in the automotive, EV and alternative energy sectors.

The BlackEarth and Metachem JV plans to supply a material portion of all imports of expandable graphite into Europe – expansion plans being initiated to capture a greater share of worldwide demand.

Key elements of the JV are:

1. BlackEarth are to source, in conjunction with its Sales and Marketing partner LuxCarbon, high-quality graphite concentrate for treatment for the new expandable graphite plant;

2. Following completion of its own plant, BlackEarth will provide large and jumbo flake graphite to the JV;

3. Each JV partner proposes a 50/50 equity and profit share arrangement with CAPEX estimated to be US$3 to 3.5 million in total;

4. BlackEarth and LuxCarbon to provide end user and product technical advice to the Metachem operational team;

5. BlackEarth will manage sales, marketing and the growth of sales worldwide;

6. Estimated initial production to be 2,000 – 2,500 tonnes per annum growing to 4,000tpa, with plans to materially grow production;

7. BlackEarth estimates Gross JV Revenue of $9 million per annum in the first year, growing to approx. $17 million – upon production ramp up to 4,000tpa;

8. Production sites have been identified and appropriate economic, social and environmental conditions have initially been assessed as highly favourable. A decision on a preferred site within the Indian Special Economic Zone (“SEZ”) will be concluded in the short term; and

9. Company names and branding is currently being prepared with a detailed announcement due in the short term.

“The signing of this JV is an exciting development in the growth of our Company,” BlackEarth Minerals managing director Tom Revy said in the company’s ASX announcement.

“To form this JV with a world leader of Expandable Graphite production is a wonderful outcome and this event follows many months of discussions between the executive teams our two companies.

“Now that we have signed off on this JV, we will shortly move to our preferred site in India and also conclude the recruitment of senior executives in India to manage the planning, construction and development phase.

“Having an offtake partner prepared to buy all initial production has also given us confidence to move forward with plant expansion plans so that we can increase production and sales over the medium term, whilst minimising operational risk.

“With first year sales projected to be almost $9 million for the JV, we expect to start receiving a steady and strong cash flow during 2022 which will also contribute to the planned development of our Maniry site in Madagascar; consistent with our initial fast-track to cash flow strategy.”