Did a database search and there is quite a bit of newspaper coverage this morning of our deal with BHP, including a nice mention in the Australian and this feature article in the Adelaide Advertiser:
NOT only will it literally put some lead in your pencil, increasing demand and uses for graphite have piqued the interest of South Australian minerals explorers.
Graphite has until recently not been of much interest to miners.
It had a steady market for some industrial processes, was used in tennis racquets, carbon fibre and pencils, but with production effectively tied up by China and demand growth modest, there was not much exploration activity.
The dynamics have changed, however, inspiring companies such as Adelaide's Archer Exploration, Monax Mining and Lincoln Minerals to ramp up their exploration plans, with a strong Eyre Peninsula focus.
Graphite mining does have an SA precedent. A mine at Uley near Port Lincoln was operated for a brief time in 1993, producing 1025 tonnes of product, but was mothballed soon after.
Strategic Energy has refurbished the production facility and is in the process of selling the project to Canada's Mega Graphite.
The Uley graphite deposit contains 6.6 million tonnes of graphite at 8.7 per cent carbon.
Mega intends to restart the mine, pending a successful share market listing in Canada.
One of the demand drivers for graphite has been the expectation of advances in the use of graphene - a super-strong, one-atom-thick form of carbon.
Archer managing director Gerard Anderson said a combination of elements was now increasing demand for graphite.
``The fact that countries like the United States and the European Union have placed a `strategic mineral' status on graphite, its emerging importance for green energy initiatives such as the lithium ion battery and fuel cell technologies and emerging technology in relation to graphene (are supporting the market),'' he said.
Mr Anderson said there was a global market for graphite of perhaps a little more than 1.2 million tonnes per year.
``The bulk of that comes as very fine-grained, micro-crystalline graphite. That primarily fuels industrial uses, carbon additives for steel, pencils, dry cell batteries, brake pads,'' he said. ``It's being demand driven. Prices have risen and about 80 per cent of production and capacity resides in China.
``China has recently shut down numerous mines, ostensibly for environmental and resource preservation requirements.''
The Chinese Government has also added a value added tax to graphite, making its export more expensive. Mr Anderson said prices had been rising, especially for the more valuable flake graphite. ``There were two distinct markets for graphite depending on the size and physical properties,'' he said.
``While there is a posted price, contracts are usually negotiated between parties. The fine, micro-crystalline material sells at a concentration above 15 per cent, but typically above 80 per cent carbon and that trades at about $US850 a tonne. Then you have flake graphite which really is just carbon.
``Fine flake is effectively between 100 and 150 microns . . . and trades around $US2000 to $US2400 a tonne.
``Medium flake, 150 to 170 microns, trades anywhere from $US2200 to $US2500. And large flake, above 170 micron, trades anywhere up to $US3500 per tonne.
``But if you can get ultra-fine, but very high purity, above 99 per cent carbon, it can sell for substantial amounts, anywhere up to $US30,000 a tonne.''
Exploration for graphite is based on the fact that it has high elec-trical conductivity.
Companies exploring for copper and gold in the past would use techniques which identified buried conductors, which would also pick up graphite.
Some of those exploring on the Eyre Peninsula in the past had drilled, expecting to find metals, but had found graphite, which at the time they were not interested in.
Mr Anderson said a lot of this exploration happened in the 1980s.
His company, and others, have been dusting those results off and have starting drill-testing sites.
His company recently reported ``exceptional grades'' of graphite at its Campoona prospect, with results such as 21m at 15 per cent carbon from a depth of 46m.
Monax Mining last week reported coarse graphite with flakes of up to 2mm at its Waddikee prospect in the centre of the Eyre Peninsula.
Mr Anderson said graphite was generally treated through a reasonably straightforward flotation process.
``The issue is about separation, how do you separate the graphite flake from the surrounding gang,'' he said.
MORE TO THE METAL THAN FIRST THOUGHT
>> An excellent conductor of heat and electricity.
>> It has the highest natural strength and stiffness of any material.
>> It maintains its strength and stability at temperatures greater than 3600C.
>> It is one of the lightest reinforcing agents.
>> It is highly resistant to chemical attack.
>> Crystalline flake graphite occurs only in a few locations around the world, usually as flat crystals.
>> Graphene is an atom-thick carbon-based material, derived from graphite, that has exceptional physical and chemical properties.
>> Almost 200 companies, including IBM, are involved in graphene research.
>> Graphene is used in applications such as nano-electronics. MAIN DEPOSITS
EYRE PENINSULA
MONAX
Waddikee
ARCHER
Sugarloaf
ARCHER
Campoona
LINCOLN
Campoona
LINCOLN
Kookaburra Gully
LINCOLN
Gum Flat
LINCOLN
Koppio
PRICE RANGE FOR +80 MESH, 94-97%C GRAPHITE (US$/TONNE)
AXE Price at posting:
40.0¢ Sentiment: Buy Disclosure: Held
(20min delay)