MRC fast tracks anode production into European battery market with superior graphite joint venture

Mineral Commodities Ltd., Belmont, Western Australia, has entered into a non-binding Memorandum of Understanding (“MOU”) with Superior Graphite Co., Chicago, Illinois, United States, to work together exclusively to negotiate and form a 50:50 Joint Venture. The JV would use Superior’s proprietary electro-thermal purification technology to purify MRC’s natural flake graphite at Superior’s existing thermal purification facility located at Sundsvall, Sweden under licence from Superior. MRC has been granted exclusivity to undertake a period of due diligence on the Sundsvall Facility.

The aim of the JV is to produce, market and supply up to ~15-20,000 tpa Sustainable Graphite Anode Material to battery manufacturers in Europe, Scandinavia, United Kingdom and Australia

Sundsvall is located approximately 1,200km south of Skaland with an existing commercial port and access to low-cost hydro-nuclear renewable energy. The Sundsvall Facility has key infrastructure in place including thermal purification capacity, electrical substructure, control rooms, bagging, palletising, laboratory facilities and administrative offices.

Based on Superior’s preliminary assessment, existing thermal purification capacity could be complemented by auxiliary technology to provide an efficient, sustainable in-situ coated anode material for Li-Ion batteries.

Most importantly, under the JV, the Sundsvall Facility would come with operating personnel and management with decades of advanced carbon manufacturing experience using Superior’s proprietary purification technology.

MRC’s Chairman, David Baker, said, “We are privileged to have the opportunity to partner with Superior. The JV would provide MRC with a faster route to vertical integration for greater margin capture, reduced technology risk and capex while maintaining our commitment to produce the most sustainable graphite anode material possible”.

Superior’s Chairman and CEO, Mr Edward Carney, said, “We are excited to partner with MRC to leverage our leading intellectual property and existing Sundsvall operations synergistically into the European battery anode market at this crucial time in demand for clean energy materials.”

MRC will immediately commence a period of due diligence on the Sundsvall Facility, the acquisition structure and the opportunity more generally and its conversion.

Superior Graphite joint venture: key terms

MRC would acquire up to a 50% equity interest in:
(a) Superior Graphite Europe Ltd, as the owner of the Facility; or
(b) a new holding company as the owner of the Facility (Special Purpose Investment Vehicle (“SPIV”).

The purpose of the SPIV is to:
(i) produce, market and sell thermally purified natural flake graphite products (including anode material) in Europe (including the United Kingdom) and Scandinavia, as well as currently existing products manufactured in the Sundsvall Facility;
(ii) hold all the assets, rights and benefits of the SPIV in accordance with the equity ownership position (50:50) of the Parties;
(iii) take direct or indirect 100% ownership of the Sundsvall Facility free and clear of any encumbrances or security interests;
(iv) contract with Superior (or the relevant subsidiary operating entity) to operate and manage the Sundsvall Facility;
(v) enter into an appropriate licence agreement with Superior for the right to use their purification technology at the Sundsvall Facility;
(vi) enter into a non-exclusive offtake agreement with MRC to purchase spheronised graphite (or other graphitic product) from the Skaland mine and Munglinup for purification at the Sundsvall Facility or any subsequently developed project utilising their purification technology;
(vii) enter into an investment agreement with MRC and Superior pursuant to which MRC and Superior agree to procure the funding for the SPIV to repurpose the Sundsvall Facility; and
(viii) develop the SPIV into a major vertically integrated supplier of purified natural flake graphite anode material for the benefit of Superior and MRC in accordance with their respective equity ownership positions in the SPIV.

About Superior Graphite

Superior Graphite Co. was founded in 1917 in Chicago, Illinois. In the late 1970s, Superior patented graphite thermal purification technology. Today, Superior operates the largest thermal purification processing capacity worldwide, with a combined capacity in excess of 80,000 tonnes per annum. Superior has purified over 100,000 tonnes of natural flake graphite material. Superior currently employs over 200 people globally and operates three manufacturing sites:

– Bulk graphite facilities, Chicago, Illinois USA
– Thermal purification, SiC processing and speciality carbons plant in Hopkinsville, Kentucky USA
– Thermal purification facility, Sundsvall, Sweden

Superior places a heavy emphasis on research and development, maintaining two R&D facilities at manufacturing sites designed to support various processing technologies and develop new products and processes.

About MRC’s graphite strategy

MRC’s 90% owned Skaland Graphite AS, is the highest-grade operating flake graphite mine in the world and the largest producer in Europe. Located in Norway, Skaland runs on low-cost renewable energy and has been servicing the traditional flake graphite market in Europe for nearly a century. MRC is executing a downstream strategy that involves vertically integrated production of sustainable graphite anode material from natural flake graphite. The Company intends to leverage the availability of Norway’s low-cost renewable energy to produce sustainable graphite anode material at a time when significant scrutiny is being placed on the security and sustainability of materials coming into the battery supply chain. The Superior Graphite Joint Venture significantly fast tracks and de-risks MRC’s strategy. Under the JV, MRC will build a micronisation and spheronisation facility in Norway, close to the existing Skaland operation, utilising Norway’s low-cost renewable energy and skilled workforce. The Company will also invest in expansion activities at the existing Skaland Graphite Operation in Norway. The Company also intends to increase exploration activities in Norway in order to secure future supply of critical raw material feedstock. MRC’s strategy also encompasses the Definitive Feasibility Stage Munglinup Project in Western Australia and Prefeasibility Stage Active Anode Materials Plant in Norway

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