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Investing In Graphite Part 2, page-69

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15/06/15

20:27

Post #: 15471040
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Originally posted by Pauldola ↑

Thanks graphite,

That's a great post and it looks like you have genuine real life experience in the Industry, that is something myself and probably the vast majority of posters here do not have so thanks again for your insight/opinion.

I completely agree with you on the fine flake consumption in comparison to any current and growth large/jumbo flake market and uses.

I witness many posters on HC who sadly simply cannot and probably choose not, to take in the above theory and basic variants that may benefit particular end use and or products.

My question of Ancuabe flake was more reference its properties, such as its expansion and the temperature used/needed for the expansion.
I have been told if you can get good expansion at sub 1000 degrees and higher than 600/700 degrees then you're in goldilocks territory so to speak. This has been reported by Superior Graphite using Kenmare Flake. Perhaps this is why YXGC were apparently so quick to show their interest in the samples sent by Triton for example?
Again for example, knl/Tanzania have reported massive expansion but the problem for some use or difference, is that they had to achieve it at around 1300 degrees. This I have been told is way too high for certain applications. Like they say - all graphite expands and the higher the temp the more expansion. I would deduce the sweet spot for certain applications needs to be achieving good expansion at a reasonable temperature. Costs. Not just energy costs but possibly the equipment used as well - if it needs to withstand high heat then it needs to be expensive equipment. Likewise this temperature variant could interfere with what you are interlacing with the graphite.
I guess I'm getting quite technical in my search for applications that suit different graphite concentrate properties/qualities.

It seems quite logical to me that should any new/up ramped future Graphite output worldwide have/show a larger percentage of larger flake sizes in comparison to today's market, then the increase in availability of these larger flake sizes would likely create lower potential average sale prices for such flake size.

With reference to natural derived Spherical graphite, I'd feel one of the safer ways for a new supplier to look to enter the market would be to get into the current feedstock supply stream in China such as a supply to BTR for example. Yet I do feel that should this wave of growth eventuate, then some westernised input really will need to step up to the mark and start competitive processing.

Do you see Hitachi announcing an intention to build a new large plant in the U.S and potentially supply Tesla as the obvious choice because of their existing connections with Panasonic?

Cheers

Paul.

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Paul,

Yes not all natural Flake Graphite's are the exact same. Each different origin of of natural flake graphite can have different properties. One major difference is the analysis of the ash. Each different origin of natural flake has different % elements in the ash. In most applications the different in Ash is not a concern to end users but in some real specialty application the % elements in the ash are important. As for Ancuabe Flake which was mined in the past by Kenmare Resources in the 90's and then closed due to fact their mining cost were higher then their average selling price the end user making graphite foil like the fact this graphite has some lower temp expansion properties that you mentioned. The issue however back in the 90's was that the graphite foil market was not able to consume all the volume produced thus Kenmare resources was forced to all sell some of their capacity into the refractory market at prices below their production cost. I believe today the companies trying to develop graphite mines with capacity over 20,000/mt will have the exact same issue. I do not believe YXGC will consume more then 20,000/mt per year and thus they will be forced to sell the remaining 80,000/mt into refractory applications at very low prices.
This agreement is just a MOU and not a take or pay contract which if I were a investor would only be willing to invest if the company had a take or pay contract with a min FOB price that was above projected production cost.

BTR

Keep in mine BTR invested in it's own low cost graphite mine in China that currently has excess capacity. So I assume BTR must first use all its current capacity.

Hitachi

I assume this added capacity is to supply to Telsa and thus I assume Telsa is preferring to use Synthetic Graphite. Not good news for the Natural Graphite Mining Companies.

Question:

It seems quite logical to me that should any new/up ramped future Graphite output worldwide have/show a larger percentage of larger flake sizes in comparison to today's market, then the increase in availability of these larger flake sizes would likely create lower potential average sale prices for such flake size.

Agree. The bigger issue is in reading all the various Jr. Graphite Mining Companies reports is the fact their average selling prices are very much over optimistic. As a potential investor I have been following the following 3 Graphite Mining Companies: Flanders Resources, Stratmin Global Resources and Valence Industries Ltd. to determine when they will be cash flow positive. The net result on Flanders was not good in that they have closed the graphite mine at present due to low selling prices below the production cost but expected since this mine was never going to be low cost or make higher purity grades. If the other 2 Graphite mines also close over time will investors wake up and realize how difficult graphite mining is and how difficult it is to sell out the mines capacity at and average price above production cost. Only time will tell.
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