With the support of Western Australian Government Agencies, EcoGraf (ASX: EGR; FRA: FMK) secured a 6.7 hectare property in the Kwinana industrial estate, 30 kilometers south of Perth. Kwinana is one of the most important strategic industrial areas in Western Australia and is part of the state’s heavy industrial zone.
The Western Australian government wants to develop Kwinana into a leading industrial location for the supply chains of the battery industry worldwide. (Readers of Goldinvest know that FYI Resources (ASX; FYI, FRA: SDL) is also planning future production in Kwinana.) The capital cost of the EcoGraf processing facility is estimated at $ 72 million. Ecograf’s facility would be the first production facility for refining natural graphite into battery graphite outside of China. In contrast to the refining of raw graphite in China, Ecograf will not use highly toxic hydrofluoric acid in its process. The EcoGraf plant in Western Australia would be the first refinery of its kind in the world.
The agreement was announced late Friday, September 25th, by West Australian Prime Minister Mark McGowan and Energy Secretary Bill Johnston on the 6,7 acre site. The government press release:
Photo (R-L) – WA Prime Minister Mark McGowan, Energy Secretary Bill Johnstone and Frank Marra, Executive Directors of DevelopmentWA, with Robert Pett, Howard Rae and Andrew Spinks of EcoGraf
The environmentally friendly processing of raw graphite into battery graphite is particularly popular with potential European customers, including EV manufacturers who are striving for a responsibly produced, diversified supply of battery graphite. Ecograph has received letters of support from customers and has signed a product sales agreement with thyssenkrupp Materials Trading GmbH, a subsidiary of the large German technology group thyssenkrupp AG, for the sale of battery graphite products.
The large industrial site was selected to provide a significant area for future plant expansion to meet expected demand. The initially proposed 20,000 tpa system would require around 2ha. So there would still be plenty of space for later expansions.
Securing the location and the political backing from the top should certainly have a positive effect on Export Finance Australia’s ongoing due diligence with regard to loan financing.
Figure 1 – Location of the 6.7 hectare site, expansion of the main road on the aluminum oxide road to improve road transport, the water treatment plant and the planned development of the Westport harbor
Figure 2 – Site layout of the production facility with 20,000 tpa
Ecograf is currently working on a financing model whereby Export Australia could grant a loan of up to 35 million US dollars, which represents around half of the estimated construction costs (see ASX announcement dated June 11, 2019).
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