A techno-economic evaluation has provided International Graphite (ASX: IG6) with solid financial projections for its proposed expandable graphite facility (EGF) joint venture in Germany.
The new study found that the facility could pay back an initial capital cost estimate of approximately $11.2 million in less than two years.
Under its current design, the EGF has the potential to produce approximately 4,200 tonnes of expandable graphite per year, with the capacity for expansion that would allow the sale of high value 99%+ expandable products.
The company is building the facility in collaboration with Arctic Graphite AS, whose major shareholder – Norwegian construction firm Nilsen Leonhard & Sønner – has extensive experience in graphite mining.
LNS recently entered into an agreement to acquire Europe’s only operating mine, the Skaland Graphite Project in Norway.
Dual Production Strategy
In conjunction with its Collie micronising facility in Western Australia, which is currently under construction, the EGF would endow International Graphite with the potential to produce approximately 12,000 tonnes of micronised and expandable graphite products from 2027.
For a capital investment of less than $20m, this would annually generate between $10m and $20m of net operating cash flow.
Chief executive officer Andrew Worland called the EGF an important plank in the company’s global expansion strategy.
“The TEE verifies our approach that strong financial returns are capable of being generated from low capital cost graphite processing facilities with far lower execution risk and dilution to shareholders, as a precursor to building new mine supply from our Springdale graphite project in Western Australia,” he said.
“The company plans to arrange construction financing in the first half of 2026, with production scheduled to commence in mid-2027.”
Expandable Graphite Process
Expandable graphite is created by treating natural flake graphite with acidic agents that, when heated, force the graphite layers apart in seconds, expanding the material by up to 300 times its original volume and creating a lightweight, insulating carbon structure.
The finished product – the price of which has grown steadily over the past few years – is used in flame retardants, thermal insulation, energy storage, and industrial foils.
International Graphite has a non-binding graphite concentrate supply agreement in place with an international commodity trading house.
It is examining the use of feedstock from various sources, as well as concentrate generated from the company’s 100%-owned Springdale graphite project.
The use of higher-grade feedstock has the potential to allow access to higher value markets.
