AMN - TANZANIA: Kibaran supply deal with Sojitz

Kibaran Resources has signed a binding exclusivity agreement with Japanese commodities trading giant Sojitz Corp for the supply of graphite concentrate produced at its Epanko project in Tanzania. Under the agreement, Kibaran will be sole supplier of Tanzanian graphite to Sojitz for distribution into markets including Japan, Korea and Taiwan.

Sojitz is a major supplier of raw material and products to the rapidly growing lithium battery industry.

The initial term of the agreement is five years. The agreement provides the framework for sales of a minimum of 14,000 tonnes/year of natural flake graphite products subject to terms and conditions. Under the existing design, the plant will be capable of producing 44,000 tonnes/year of flake graphite concentrate. Kibaran already has binding agreements for 30,000 tonnes including 20,000 tonnes with German industrial giant ThyssenKrupp.

Kibaran managing director Andrew Spinks says the company’s relationship with Sojitz would also provide a platform to increase production capacity at Epanko as market demand increases for battery grade graphite.

The execution of the agreement follows the completion of extensive due diligence by Sojitz, including a global review of potential graphite suppliers to meet the increasing demand from the lithium battery industry. That due diligence focussed heavily on analysis of Epanko graphite quality, including extensive test work by end users.

The Sojitz agreement provides an avenue for long-term sales of Epanko graphite into the fast-growing lithium-ion battery markets of Japan and Korea. Sojitz will also market Epanko graphite for use in a range of key applications in Japan, Korea, Taiwan, China and the US.

As one of the largest graphite traders in Asia and a leading trader of lithium compounds in the Japanese and Korean markets, Sojitz has an in-depth understanding of the lithium battery market.

Spinks said Kibaran had partnered with the leading supplier of commodities to the lithium battery industry. “Kibaran is proud to have yet another ‘blue chip’ partner in Sojitz Corporation and is expecting to formalise further strategic alliances to tie down the remaining major supply portals outside of China.

“Kibaran is now studying the potential to increase Epanko’s production capacity based on forecast growth in lithium battery demand. Graphite demand is forecast to treble on the back of the lithium battery demand and Kibaran’s relationship with Sojitz and the ability to expand Epanko’s capacity means it will be ideally positioned to capitalise on this opportunity.”

Kibaran is also advancing its plan to produce battery-grade graphite and other value-adding strategies via the development of a downstream processing plant.

Sojitz also intends to use its network to play a role in developing the downstream battery-grade graphite processing plant.

www.kibaranresources.com.au

News courtesy of International Mining