'Do you think it possible RNU go forth with a FID on the mine and use current funds to build before securing BOAs for PSG?
'IMO... quite possibly, yes.
When 72.4% of your flake size distribution is small flake (2019 numbers - may have been optimised since then..), and the small flake market is starting to experience significant undersupply issues combined with forecast increased demand, then the Siviour mine and concentrator looks like an attractive low capex option to participate in the tightening and insecure supply chain of natural graphite.
We have a low-cost supply of ideal battery anode material feedstock. Prices for this feedstock are starting an uptrend now and I think mgmt consider Siviour mine and concentrator as a low(er) risk (and high margin) way to leverage ourselves in the near-term to this uplift in graphite flake demand now as a way of lowering our need for debt (or dilutive) funding for the PSG operation later.
'Increased demand leads to anode development
Another factor behind the graphite export story is the robust development of the graphite anode market in China, which meant that more fine flake would be consumed within China.
Fastmarkets’ assessment of the price for graphite flake, 94% C, -100 mesh, fob China, rose by 8.43% to $830 per tonne on December 1 compared with the start of the year, when it was $760 per tonne. This was mainly driven by demand from spherical graphite production and supply concerns.'
'Chinese output of uncoated spherical graphite (uSPG) was expected to be around 300,000 tonnes in 2022.
To keep up with demand, expected uSPG output will need to be close to 450,000 tonnes in 2023, according to Amy Bennett, principal analyst at Fastmarkets Research.
China’s annual output of flake graphite has averaged 707,400 tonnes over the past five years, according to data from the US Geological Survey (USGS). This, Fastmarkets understands, would mean a supply gap that needs to be filled with imported materials.'
Possibly POSCO have tapped DC on the shoulder and quietly asked for an expedited path to flake production? POSCO stump up the lion's share of the remainder of Siviour CAPEX leaving DC in no immediate need to rush into an Offtake agreement... pure speculation.
I think practically it also makes sense to start with Siviour first and make sure we are smoothly into production of flake before bringing online the downstream operation. Lowers execution risk.
(20min delay)
