After unveiling its five year strategic plan in April, ASX-listed Mineral Commodities has finished the June quarter on a strong note with solid and developing performance across its heavy mineral sands and battery feedstock divisions.
At the company’s Tormin heavy mineral sands operation on the west coast of South Africa, mining and processing throughput remains above budget expectations.
Ore mining remained strong at an annualised rate of about 2.75 million tonnes per annum, helping the company to produce 73,602 tonnes of final concentrates — a solid 54 per cent increase from the previous quarter.
The ratio of revenue to cost of concentrate sold from Tormin came in at a solid 1.28 for the quarter, increasing from 1.15 in the previous quarter and from 1.07 in the same quarter last year.
More than 10,000km away in Norway, Mineral Commodities has achieved its third consecutive quarter of stabilised operating performance at its Skaland graphite mine after a blight fire in the site’s processing plant and failure of the autonomous grinding mill both disrupted operations.
The ratio of revenue to cost of graphite sold from Skaland clocked in at 0.97 for the June 2022 quarter, higher than the previous quarter of 0.94. The figure also marked a significant improvement on the ratio of 0.84 achieved during the December quarter of 2021.
Mineral Commodities says the result reflects a lower unit cost of goods sold and a continuation of the company’s success in returning Skaland to profitability.
It revealed it is on track with its aspirations to become a leading and diversified, vertically integrated producer of graphitic anode materials and value-added mineral products.
With a supply of graphitic anode products, Mineral Commodities plans to capitalise on the fast-growing demand for sustainably manufactured lithium-ion batteries — of which graphite is a large component — particularly in Europe.
The International Energy Agency’s 2019 data suggests the European Union’s transport sector alone equated to more than 11 per cent of global transport emissions or nearly 3 per cent of global total emissions.
Given its abnormally large carbon bill, the EU plans to continue its stride towards net-zero target with a strong fleet of energy-efficient electric vehicles and in preparation has laid its groundwork with an array of major battery manufacturing factories.
In November 2021, Pan-European banking group UniCredit Chief Economist, Erik Nielsen said the European Union had formed a “battery alliance” with “some 24 battery gigafactories” to be established domestically.
Nielsen also suggested the increased capacity would be enough to equip about 9 million electric vehicles per year.
With a clear market in mind, Mineral Commodities diversification into the battery metals sector will stem from the company’s heavy minerals division acting as a base of support.
Since 2017, Mineral Commodities’ heavy minerals division has contributed more than US$25m towards its battery mineral initiatives.
The company’s focus is to increase production at Skaland to its permitted 16,000-tonne-per-annum limit whilst developing its other graphite asset in South Australia, the Munglinup project, to further increase production.
Notably, Mineral Commodities hails Skaland as the world’s highest-grade operating flake graphite mine at 1.84Mt going an extraordinary 23.6 per cent graphitic carbon.
Munglinup, on the other hand, holds a 7.99 million tonne resource at about half the grade of Skaland, however it is substantially larger and represents a significant opportunity for the company to enjoy economies of scale.
Mineral Commodities is targeting final investment decisions into the expansion of Skaland production and development of Munglinup in the second quarter of next year. Once its initiatives are met, the company aims to kick its proposed commercial-scale graphitic anode plants into operation by 2024.
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