okay got it
Renascor Resources managing director David Christensen at the site of the planned Siviour Graphite Project near Arno Bay. Picture: Courtney Holloway
SA Business
Renascor Resources expects to build a major graphite mine on the Eyre Peninsula later this yearGiuseppe Tauriello, The Advertiser
March 11, 2019 5:30pm
Subscriber only
Half-way between Whyalla and Port Lincoln, just outside the small fishing and tourist town of Arno Bay, lies one of the world’s biggest graphite deposits.
And if all goes to plan, ASX-listed explorer Renascor Resources will start mining at the site by the middle of next year.
The Siviour Graphite Project would become the country’s only operating graphite mine, creating more than 100 jobs during construction and at the ongoing operation.
With probable reserves of 3.6 million tonnes, it is by far the country’s biggest graphite deposit, and according to Renascor, the fifth biggest globally.
Graphite can be found just two metres below surface, with the bulk of the ore body less than 25 metres underground. The shallow geology and horizontal orientation means its relatively cheap to mine.
And coupled with Siviour’s location, close to existing infrastructure, that makes the project a “world beater” according to managing director David Christensen.
“Our goal is to give Australia a world-class graphite mine that can compete in any price environment with any development in the world,” he said during a visit to the site last week.
“Graphite is easy to find and relatively easy to mine. The hard part is producing a product at a low enough cost to be able to finance the mine’s development and stay in business. We think this is the real difference with Siviour.
“It’s one ore body, it’s not a series of deposits - it’s just one great big massive ore body and this helps the economics work.”
Once mined and processed on-site, graphite flakes produced at Siviour will be transported to Port Adelaide by road, before being shipped overseas.
Renascor is currently considering two options to develop the 30-year, open cut operation.
The preferred option requires a larger-scale investment of $132 million, delivering initial annual production of 142,000 tonnes at an operating cost of $446 per tonne.
A second option requires up-front investment of $39 million, producing 22,800 tonnes in each of the first three years, at an operating cost of $768 per tonne. A second stage would then ramp up production and reduce operating costs.
Ultimately, the decision hangs on the company’s ability to secure debt finance for the project.
While acknowledging that competing projects, primarily in east Africa, have found it difficult to raise debt, Mr Christensen is confident that Siviour’s geology and location set it apart.
“Graphite from South Australia makes sense because it is a response to that sovereign risk issue,” he said.
“Going through the regulatory process can be more cumbersome here but it’s fair, it’s transparent, there are precedents, and it just makes it easier to sell to the international community - especially that debt financing community.
“If we can get debt we want to go a bit bigger, we want to do it in a way where we can keep that cost of production down.
“For South Australia as a region this would be quite significant - once we get started we could be producing for 30 years, 40 years, 50 years.”
Siviour was discovered in early 2016 during an exploration program led by South Australian geologist David Clarke and mining veteran Dick Keevers.
Later that year, Renascor acquired the rights to the project, with Mr Clarke becoming the company’s biggest shareholder and Mr Keevers appointed chairman.
Last year Renascor struck an agreement with the Siviour family - owners of the property - to facilitate development of the mine, with a right to purchase the land this year.
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The company expects to complete a definitive feasibility study next quarter, while approval for a mining lease is expected imminently.
Construction could start by the end of the year, pending finance and final mining approvals, paving the way to production by the middle of next year.
While graphite has traditionally been used in industrial settings, the application of spherical graphite - a processed form of the raw flake - in the lithium ion battery is expected to drive future demand.
Spherical graphite fetches prices more than double the $US800 to $US1800 per tonne for graphite flake.
To tap into the lucrative downstream market, Renascor is considering development of an $89.9 million spherical graphite manufacturing facility in South Australia, with Port Adelaide, Whyalla, Port Augusta and Port Pirie identified as possible locations.
“This would be pretty exciting, especially for the state, because now instead of just shipping our raw material directly offshore, if you can do some of that value added work there’s a multiplier effect,” Mr Christensen said.
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