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EcoGraf (ASX:EGR) - Managing Director, Andrew Spinks - The Market Herald
Managing Director, Andrew Spinks
Source: Business News
  • Eco-friendly graphite company EcoGraf (EGR) is trading strong today after presenting at Benchmark Mineral Intelligence's Battery Day event
  • Benchmark's event gave the opportunity to several companies to showcase their work in the clean energy and electric vehicle sectors in reaction to Tesla's Battery Day event
  • EcoGraf's presentation highlighted some of the company's upcoming plans
  • Among these is the 20,000-tonne-per-annum graphite processing plant to be built up in Western Australia
  • The company also highlighted a potential debt facility with the Australian Government and June's sales deal with German tech giant thyssenkrupp AG
  • EcoGraf shares are currently trading almost 24 per cent higher and worth 21 cents each

Eco-friendly graphite company EcoGraf (EGR) is trading strong today after presenting at Benchmark Mineral Intelligence's Battery Day event.

Benchmark's event included a series of webinars reacitng to Tesla's Battery Day, which also kicked off this week.

While it was unlikely Elon Musk's tech empire would name any small-cap ASX stocks in its major event, Benchmark gave several companies the opportunity to showcase their work in the clean energy and electric vehicle sectors.

In its presentation, EcoGraf highlighted the plans for its upcoming 20,000-tonne-per-annum processing plant in Western Australia, its recent sales deals, Australian government support, and more.

What does EcoGraf do?

Essentially, EcoGraf focusses on the environmentally-friendly production of graphite for use in lithium-ion batteries.

Typically, the growing demand for lithium-ion batteries presents a Catch-22 situation because of the environmental damage that can be done by producing high-purity spherical graphite.

Hydroflouric acid, which is extremely toxic, is generally used to achieve the necessary grade of carbon needed for battery graphite. This means as individuals switch to electric vehicles and more eco-friendly tech solutions, the demand for battery graphite goes up, and the environment is damaged anyway.

EcoGraf, however, has found an alternative, environmentally-responsible way to purify graphite and create the high-value product.

According to EcoGraf, graphite is expected to dominate the battery mineral market in coming decades, with World Bank's electric vehicle forecast suggesting demand for natural graphite will surge by 700 per cent by 2025.

WA processing plant

The company's planned processing plant will be the first commercial graphite purification facility outside of China.

The company plans to first build the facility up to process 5000 tonnes per annum of the material. This stage is expected to cost US$22.8 million (roughly A$32 million).

By 2022, however, EcoGraf plans to spend another US$49.2 million (roughly A$69 million) to expand the facility to process 20,000 tonnes per annum. At this stage, the facility is predicted to have a pre-tax net per cent value (NPV) of US$141 million (roughly A$198 million) and annual earnings before interest, tax, depreciation and amortisation (EBITDA) of US$35 million (roughly A$49 million).

The graphite processed at the WA facility will be exported from Perth into lithium-ion battery markets across the globe.

What about the money?

EcoGraf won't have to build the facility up independently, either; the company has received support from the Australian Government for the project.

Currently, the company is progressing funding support and debt financing with the Australian Government. Specifically, the two parties are working on a US$35 million (roughly A$49 million) debt facility.

EcoGraf has also landed a 10-year sales deal with German tech giant thyssenkrupp. Under the deal, EcoGraf will supply a thyssenkrupp subsidiary with 2310 tonnes of spherical graphite (SpG) and 2310 tonnes of graphite fines in the first year.

In the second year, EcoGraf will supply 3600 tonnes of SpG and fines, and for the third year onwards, 10,020 tonnes of SpG and fines.

These were just a few of the major points in today's presentation, but it seems investors liked the plans.

EcoGraf shares are trading 23.53 per cent higher and worth 21 cents each at 1:54 pm AEST. Earlier this afternoon, EGR shares hit a four-year high of 24 cents each.


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