Volt's Non-Binding MOUs - Part 1

As no one is discussing it, I will me posting the second company here as well. Plus it is convenient for everyone to read all the Chinese companies in the same thread.

The second company is Shen Zhen Sinuo, one of the top 5 anode producer in China. Signed for 20,000t of graphite concentrate. Current capacity of 20ktpa. As they're not publicly listed, MCAP is unknown. But in 2015 total revenue was $RMB200m, and 2016 is expected to be 300% growth. 1H 2016 already hit $RMB300m. To be conservation, 30% margin of $RMB600 makes it $RMB180m, give it a 10x PE ration makes ir RMB1.8b, ~$AUD360m company. Just a figure in the ballpark. As they're not listed, not much info could be found, but I expect the company will have similar customers.

The company is famous for its R&D in graphite manufacturing. Mainly focus on synthetic graphite.

If you don't know, the China EV market is largely dominated by synthetic graphite in anode, despite of its higher cost of production. It does has better cycles, in some of performance and works better with electrolyte (this is said by Shan Shan). But it has worse energy capacity and perform much worse in colder environment. Since synthetic graphite could be emulated between competitors, this could be one of the downside of synthetic graphite.

For natural graphite, it has lower cost of production, higher battery capacity but worse cycles compare to synthetic. Customers outside of China prefer natural graphite. But in the long term, natural graphite would be preferable in China. (said by BTR, biggest and best anode producer in china)

Chinese government too, sees the problem of export lower grade graphite @ low price while import high grade graphite @ high price. China itself lacks flake graphite in particular, only several flake graphite discovery so far. Plus the grade & flake size won't be as good as the ones outside of China. I do not expect them to mine it within the next few years because graphite(flake only) has been named one of the strategic mineral by China Ministry of Land & Resources. Having that said, they will try to reserve as much as they could for the strategic minerals, and by import & mine outside of China as much as they can.

Correct me if I am wrong, but right now graphene could only be made by natural graphite? If yes, another plus is that Chinese government put the commercialisation of graphene as one of the top priority.


Graphite in itself is definitely not in shortage, and isn't expected to have it at all. But if you break it down into different type of graphite, then you'll see a clearer picture. I've tried really hard to collect as much info as I can and break them down, and I can tell you it's almost impossible to do so. There simply isn't much figures to be taken.

It is indeed one of the hardest research topic I've come to, compared to lithium and cobalt. But to sum it all up:
1.China has little flake graphite, which are all low grade compare to the ones in Africa( or outside of China)
2.When the biggest anode player in China say natural graphite will be the preference in the future, you should pay attention to it.
3.Flake graphite has been named as one of the strategic mineral by China Ministry of Land & Resources.
4.Chinese is definitely looking for better quality products because anode significantly affects the performance of the battery
5.Anode accounts for about 5%-15% of the total cost. There are of course several ways to reduce costs, and one is certainly acquisition(this applies to every single company that has graphite, lithium and cobalt.

Good luck!

Great stuff and very interesting points.

Point 5 is a certainly something that all volt holders should be aware of. To control the entire supply chain would certainly work in there favour (the Chinese that is).


In your last post you said "Chuangya Power Battery Materials, It currently has a ~$AU240m MCAP. It has 15,000tpa of anode production capacity."

Is there plans to upgrade that anode production capacity from your reading or trips to China? I note that Volt have signed a 20,000tpa MOU with them. Production won't allow for the MOU if I am following this correctly?



I know you were recently in China with some pretty influential people in the lithium space, can you disclose if you met with any of the 3 MOU partners vote has?



Very curious to see your write up of Optimum!!!