{australien_flagge}EcoGraf Limited (ASX: EGR; FSE: FMK; OTCQX: ECGF) has qualified with specialty chemicals company Posco Future M, part of South Korean industrial conglomerate POSCO International (KRX: 047050), as a future supplier of anode graphite for the production of natural graphite anodes for lithium-ion batteries. Ecograf announced today that the two companies have signed a strategic cooperation agreement to this effect.
{australien_flagge}EcoGraf Limited (ASX: EGR; FSE: FMK; OTCQX: ECGF) has qualified with specialty chemicals company Posco Future M, part of South Korean industrial conglomerate POSCO International (KRX: 047050), as a future supplier of anode graphite for the production of natural graphite anodes for lithium-ion batteries. Ecograf announced today that the two companies have signed a strategic cooperation agreement to this effect.
The agreement follows extensive testing of the performance of EcoGraf’s graphite products. The partners describe a framework for collaboration over a ten-year horizon. POSCO Intl’s interest is to gain a reliable and environmentally friendly supplier of battery anode material for its end user POSCO FUTURE M (formerly POSCO Chemicals Co. Ltd).
EcoGraf and POSCO Intl have agreed to enter into definitive agreements for the sale and purchase of EcoGraf’s battery anode material products for an initial term of ten (10) years from the start of production. EcoGraf will meet POSCO Intl’s battery anode material requirements by supplying the following indicative quantities of products per year. In the first year, the supply quantity shall be 7,500 – 12,500 tons, in years 2-5: 12,500 – 20,000 tons per year, and finally in years 6-10: 20,000 – 40,000 tons per year.
Development in Tanzania to be driven by cooperation
The parties have also agreed to cooperate in important key areas. Joint development in Tanzania will play a special role in this. The partners intend to establish a global center there for the supply chain of battery anode materials in Tanzania. This includes the development and expansion of the Epanko graphite mine and the Merelani-Arusha graphite project. It also includes the development and supply of equipment for the micronization and spheronization of battery anode material. POSCO Intl is to be commissioned with the engineering, construction as well as financing.
To enable Posco to utilize EcoGraf’s proprietary graphite purification technology in the future, Ecograf plans to locate EcoGraf™ battery anode material processing facilities near planned POSCO FUTURE M anode production facilities. This is expected to improve logistical and operational efficiency. The partners aim to reduce supply chain risks in South Korea, Europe and North America through their technical collaboration. EcoGraf HFFree™ anode recycling is to be an integral part of the collaboration.
The bottom line is that while the cooperation agreement between Ecograf and Posco is not formally a binding offtake agreement, it could prove to be much more valuable to both partners than a simple supply relationship. Ecograf is known to be aiming to become a vertically integrated supplier of battery-grade anode material, starting with mining in Tanzania and ending with the processing of natural graphite using EcoGraf HFFree™ technology. Posco subscribes to this strategy in terms of safe and ESG compliant supply chains and intends to specifically support the development in Tanzania prepared by Ecograf. Tanzania may thank Ecograf. Posco’s and Ecograf’s commitment could lead to a technology transfer that will enable the African country to create more value in the long term than just by exporting raw graphite. This fits perfectly with the new economic direction of the country by the new president. Accordingly, there could be three winners in the strategic cooperation: Posco gains supply security and access to environmentally friendly processing technology; Ecograf gains a reliable world-class customer; and Tanzania establishes itself as a future qualified partner in the battery supply chain. While China will remain the number one supplier of anode graphite, it is even more important to build global alternatives.
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