Media Reports, page-945

MNS timeframes are aggressive. They want to build a pilot concentrate processing plant at their mine in Tanzania and a AAM plant in the US then build the real thing all in 2 years. The off-take from Tesla is for a minimum 17.5ktpa of AAM beginning in Feb 2025. The agreement contains a customer option to increase to 35ktpa.

They suffer the same problem as BKT. 41% of their flake is Jumbo and Super Jumbo which is 0 to +50 mesh size. They are planning to mine 236ktpa of concentrate producing 23ktpa Super Jumbo, 75ktpa Jumbo and 128ktpa large, medium and Fine. They'd be lucky if ~47ktpa is fine (battery grade). The advantage they have over BKT is they are planning to produce their own AAM becoming fully integrated. They may choose to use medium size flake (-80 to +100) to produce AAM, increasing their AAM production costs therefore taking a hit on their margins but still remaining profitable.

The latest presentation didn't say how big of a AAM plant they intend to build. For now, if we go with Tesla taking 100% or 35ktpa, they need ~60ktpa concentrate (fines/medium) to produce it. The ratio will go up if the plant is any bigger. They'll have to use more medium size flake or buy fines on market.

Their resource grades are terrible. Only 5.4%. 4.7% measured. They need to process a lot of dirt (5mt). They do have an off-take for 100kt/yr of all graphite sizes concentrate with Traxys Europe over 6 years. Traxys is a raw materials trading company. No idea who they'll sell it to. MNS will require all the fines for themselves so it will be mainly Large, Jumbo and Super Jumbo. I don't think Europe uses 100ktpa larger size flakes. This leaves 76ktpa non battery grade MNS needs to find buyers for.

As I've been saying. There is going to be a massive amount of larger size flake hitting the market in the next 5 years looking for buyers. More than battery grade actually. Gallois SA in Madagascar is looking to sell 500ktpa from its 3 mines. Every Canadian mine has 70%-80% flake size >-100 mesh fines. They all want to be fully integrated but need to get rid of their larger size flake so they can keep mining to produce battery grade for their AAM plants.

It's easy to see flake size prices becoming inverted in the near future. You need all these new mines begin to become operational before it happens so probably won't happen for 2-4 years. Unless of course Gallios starts dumping their large size flake on to the market.

Anyway, be careful looking at graphite charts predicting the future. Make sure you know if they are talking about battery grade fines or all sizes of graphite. Same goes for AAM. Make sure you know if it's natural, synthetic or both. It's so easy to get confused.