SYDNEY: EcoGraf Australia Limited has signed a letter of intent (LOI) with GR Engineering Services Limited for an engineering, procurement and construction contract for the development of a 20,000 tpa battery graphite facility in Western Australia.
EcoGraf and GR Engineering expect to enter into a formal contract for the new, state-of-the-art manufacturing facility. The parties have been working to complete pre-development activities for the project and the Company is finalising its arrangements with the Western Australian Government’s land development agency over a proposed 6.7ha site in Kwinana.
The proposed development has a pre-tax net present value of $141 million, generating an internal rate of return of 36.6% and annual EBITDA of $35 million based on an upfront capital cost of $22.8 million for an initial 5,000 tpa, followed by a further $49.2 million to expand production to 20,000 tpa of battery graphite.
The project’s forecast economic contribution to Western Australia is significant on both an economic and strategic front, directly employing more than 250 workers during construction and supporting Government plans to position Australia as a global leader in the environmentally, ethically and socially responsible manufacture of battery materials.
Global demand for battery graphite is expected to increase by over 700% as significant investment continues in Europe to transition towards clean renewable energy for vehicle and industrial applications.
The Company has received strong interest from prospective customers and is making excellent progress towards product sales and offtakes.