My guess is it depends on who the most likely customers are that EGR are talking to and when they need purified graphite by.
Customer locationIf the customer is in Europe then the supply line of Tanz - Kwinana - Europe is ugly, as is Tanz - Kwinana - East coast USA. If however the customer is somewhere like South-east Asia the supply line of Tanz - kwinana - South East Asia doesn't add that much additional distance. It may not be the best option but its at least an ok option.
When the customer needs the productThe IRA contains a Critical Minerals Requirement that prohibits receipt of $7,500/vehicle credits if the battery contains any critical minerals processed by a foreign entity of concern. This prohibition takes effect from 1 January 2025. The effective prohibition date is however weeks if not months earlier than this because I understand the IRA conditions apply when the vehicle enters service (is delivered rather than when sold or made). This creates a major issue for OEM's late 2024 production. If they make a 2024 compliant, 2025 non-compliant vehicle in late 2024 there is an increased commercial risk. If they don't sell and deliver that vehicle by 31 December 2024 the customer purchasing it won't get the credit from 1 Jan 2025. If there are equivalent compliant vehicles a customer could buy, the OEM is basically going to need to discount the price to the point where an exempt high income individual will buy it, or its competitively priced through a full $7,500 discount. Despite EGR's lack of progress, I suspect they are fielding calls asking what's needed for EGR to deliver product from late 2024. Given Kwinana's permitting status, it would appear to be a possible 2025 supply source.
The IRA is also going to quite soon create quite a cost/pricing Dilemma. If Spherical Graphite was a $280 input for a vehicle ($4/kg and 70kg), there's the problem that from 2025, using the wrong graphite will prevent a $7,500/vehicle rebate being receivable. Very quickly you will get the situation of purchasing managers saying, I'm not looking for Chinese graphite. Just tell me the price and quantity of IRA compliant graphite. For a few months or even the first few years a large IRA/Chinese price gap may emerge. A price of $20/kg could be sensible for an OEM to pay if they have a vehicle that would otherwise be compliant. A situation could emerge where perhaps $10+/kg IRA compliant spherical graphite pricing will emerge for a brief period until more capacity is built. Even EGR sold even 10,000t at this sort of price it completely changes the economics of a project. Speed to commercial production becomes much more important than capital cost or operational costs. This could be why Kwinana is again being mentioned.
https://www.whitecase.com/insight-alert/us-treasury-department-publishes-proposed-guidance-clean-vehicle-tax-credits#:~:text=A%20foreign%20entity%20of%20concern,Requirement%2C%20tax%20credits%20will%20be
US Treasury Department Publishes Proposed Guidance on Clean Vehicle Tax Credits | White & Case LLP (whitecase.com)
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