Lying off the east coast of the African continent, Madagascar is becoming increasingly known as a major host for graphite – one of the most critical elements in the development of lithium-ion batteries (LIBs) and electric vehicles (EVs). Notably, Madagascar not only hosts large resources of graphite, much of its product is also of the high quality that LIB and other renewable energy developers are seeking.
There is a clear consensus amongst analysts across the globe that graphite is now one of the most, if not the most, important minerals in the EV battery metal race. Graphite is the key element that forms the anode of the lithium batteries. Some say that without it, there will be no energy revolution and the trillion-dollar EV market might not exist. Each EV battery contains between 20 to 30% graphite, which means that graphite demand will soar in tandem with EV demand.
While EV giants have been busy scrambling for lithium sources around the world, new concerns have arisen about a lack of graphite supply. Both China and the U.S. are now struggling with a graphite squeeze. In 2019, the global graphite market was valued at US$14.9B. By 2027, it’s expected to be valued at nearly US$22B.
A new EV battery production outlook report from Fastmarkets forecasts demand for graphite from the battery sector alone will rise by 36% to approximately 594,000 tonnes in 2022, from around 437,000 tonnes in 2021. “We will need to see rising production of both synthetic and natural graphite to meet the battery sector’s graphite needs this year,” the report said.
With those sorts of demands being felt across the globe, significant focus is being turned on graphite-rich countries like Madagascar in the race to bring critical new projects to the market. But why Madagascar? According to Fastmarkets, there are key advantages:
- A large source of high-grade, large flake graphite
- Significant high-quality data from historic French exploration and production
- Low cost exploration – deposits close to surface
- Extreme tropical weathering – soft clay host
- Low-cost mining and processing
London-headquartered Tirupati Graphite plc (LSE: TGR) is one of those that views Madagascar as an ideal location for providing key supply to the EV market.
“Madagascar offers weathered, low-cost saprolite hosted graphite deposits with a large concentration of high-quality jumbo and large flakes and crystalline structure. This, combined with free dig mining, easy liberation and flake size retention possible, makes Madagascar an ideal location for primary graphite mining and provides the potential for efficiency and lean mining process,” the company says.
Significant focus is being turned on graphite-rich countries like Madagascar in the race to bring critical new projects to the market
Sahamamy Project
Tirupati Graphite is currently fast-tracking expansion of the Sahamamy primary graphite project in Madagascar. Construction of an 18,000 tonnes per annum second module to increase the company’s flake graphite capacity in Madagascar to 30,000 tonnes per annum is on track to enter production in second half of 2022.
The Sahamamy expansion is part of the company’s mid-term target of increasing Tirupati’s production capacity to 84,000 tonnes per annum by the end 2024.
Molo Project
Elsewhere, NextSource Materials Inc. (TSX: NEXT) has recently obtained robust Preliminary Economic Assessment (PEA) results for an enhanced Phase 2 expansion of its 100% owned Molo Graphite Mine Project in southern Madagascar.
The PEA considered an enhanced Phase 2 expansion consisting of a stand-alone processing plant with a production capacity of 150,000 tonnes per annum of flake graphite concentrate over a 26-year life of mine.
The PEA projects that the capital costs to construct 150,000 tonnes per annum of processing capacity would be US$155.8M with a pre-tax NPV utilizing an 8% discount rate of US$929.6M and a pre-tax IRR of 41.1%. The PEA assumed the Phase 2 processing plant will be built adjacent to the 17,000 tonnes per annum Phase 1 processing plant, currently under construction.
President and CEO, Craig Scherba, said the PEA defines the strong financial returns of a larger scale operation and significant scalability of Molo as market demand for flake graphite for use in electric vehicle batteries is rising.
“A Phase 2 expansion of this magnitude will position NextSource as a major global supplier and will underpin our vertical integration strategy to construct our own battery anode facility in due course, enabling direct supply to the electric vehicle battery market,” said Mr Scherba.
The Molo project ranks as one of the largest-known and highest-quality flake graphite deposits in the world, hosting a National Instrument 43-101 compliant total combined graphite resource of 141.28M tonnes at 6.13% total graphitic carbon (C), with a contained ore reserve of 22.44M tonnes at 7.02%C.
Maniry Project
ASX-listed BlackEarth Minerals (ASX: BEM) is on target for completion of a Definitive Feasibility Study (DFS) for its large Maniry graphite project by mid-year.
The company recently completed a significant drilling programme at Maniry which included 3,300m of infill drilling at its Razafy Resource and 600m of geotechnical drilling. Notably, the infill diamond drilling programme identified significant graphite mineralization below the current Indicated pit levels.
The new results will be included in modelling and data interpretation with a Measured Resource expected to be produced in coming months. BlackEarth Minerals is currently in the final stages of a large-scale testwork programme with battery anode manufacturers to finalize offtake arrangements as part of the Maniry development.
Anjamanga Project
International Madagascar specialist PR Global Resources (PRGR) recently successfully completed Phase 2 exploration work at the Anjamanga Graphite Mine Project.
The programme included 334 pits, 15 auger drills and 1,165m of trenches with collection of over 495 samples which have been sent to the lab for analysis. The complete Phase 2 exploration was focused on Anjamanga South AJMS2 prospect. The team has identified over 39 graphite schist layers covering surface area of 673,340m2 extending from surface and grade at possibly 9% TGC subject to confirmation of results from the lab.
The PR Global Group holds mineral licenses covering around 3,000m2 spread over central, western and southern Madagascar.
With global graphite demand reaching breaking point, Madagascar is on target to play a significant role in providing key new sources of the critical metal to the EV battery market.
