Graphite, manganese and vanadium ride high on soaring demand for battery minerals

The December quarter saw a flurry of activity in the Australian battery minerals space as the country is rapidly becoming a key player in the global battery materials supply chain.

There is a need for more electric batteries to be produced in line with the growing global demand for electric vehicles (EVs).

This has created a surge in demand for battery minerals such as graphite, manganese and vanadium, which are used in the production of these batteries.

Backbone of the EV revolution

Under the International Energy Agency's (IEA) Announced Pledges Scenario, or APS, based on existing climate-focused policy pledges and announcements, electric vehicles are presumed to represent more than 30% of vehicles sold globally in 2030 across all modes.

To reach this, global battery capacity will need to expand.

Today the world is manufacturing around 340 GWh/year of batteries and by 2030, the requirements would be roughly 10 times higher, requiring full output from around 100 gigafactories.

According to the APS, the supply of battery minerals will need to increase by up to one-third by 2030 to match the demand for EV batteries to satisfy global pledges and announcements.

A range of challenges continues to threaten output, including the need for large investments to establish mining operations necessary for supporting battery minerals production globally.

Let’s look at how some of the ASX-listed battery minerals juniors performed over the December quarter.

In the spotlight: ASX graphite stocks

Evion Group

Evion Group NL (ASX:EVG) completed and published a definitive feasibility study (DFS) for its wholly-owned Maniry Project in Madagascar during the December quarter.

The DFS demonstrates compelling financial returns and found the graphite produced will be suitable for a range of value-added products, including the EV industry.

Evion’s DFS also supports Madagascar as an optimal location for graphite processing with recent reports indicating that Madagascar has the potential to be the largest producer of graphite outside China.

A detailed Environmental & Social Impact Study (ESIA) program is underway with completion due in the short term – the ESIA will underpin final Mining Licence approvals.

Evolution Energy Minerals

During the quarter, Evolution Energy Minerals Ltd (ASX:EV1) started reverse circulation exploration drilling at its Chilalo Graphite Project in southeast Tanzania.

The drilling program, which concluded in late 2022 due to the onset of the wet season, comprised 44 holes for 5,440 metres, with assay results expected to be available in the March quarter.

The updated DFS and front-end engineering design (FEED) for the Chilalo Project is expected to be released in early 2023.

Evolution has also appointed a US-based specialist consultant with experience in the battery anode sector and in government lobbying to assess the establishment of a downstream processing facility in the USA.

First Graphene

Graphene supplier First Graphene Ltd (ASX:FGR, OTCQB:FGPHF) closed out the second quarter and first half of FY2023 with strong revenue growth compared to the same periods last year.

That included quarterly revenue of A$144,360 (unaudited), showing an ~200% increase on the same quarter from FY22.

Further to this, the first half revenue for FY23 grew to ~A$304,000 (unaudited), about 65% higher than the first half of last financial year, and predominantly from new clients and applications, with a shift into revenue sourced from the cement and concrete segment.

Over the past few months, First Graphene has progressed to advanced commercial-scale trials with several major industry players across the cement and concrete, composites and plastics, and the coatings, adhesives, sealants and elastomers (CASE) segments.

Sovereign Metals

Sovereign Metals Ltd (ASX:SVM, AIM:SVML) is well advanced with a pre-feasibility study (PFS) for the Kasiya Rutile Project, an industry-leading major source of critical raw materials from Malawi.

The PFS for Kasiya continued during the December quarter and is on track to be completed in H1 2023 with all major work programs progressing well.

Sovereign hand-auger team preparing for drilling at the Kasiya Project.

Sovereign’s PFS will build on the expanded scoping study (ESS) which confirmed Kasiya as potentially one of the world’s largest and potentially lowest cost producers of natural rutile and natural graphite with a carbon footprint substantially lower than other current and planned producers.

In November 2022, a memorandum of understanding (MoU) was signed for the supply of 20,000 tonnes of natural rutile per annum from Kasiya to US-based Chemours, one of the world’s largest producers of high-quality titanium dioxide pigments.

In the spotlight: ASX manganese stocks

Accelerate Resources

Accelerate Resources Ltd (ASX:AX8) continued to advance its strategy focused on high-grade and high-value manganese at its East Pilbara assets in Western Australia.

The company completed its Phase 2 drilling at Woodie Woodie North Manganese Project in November, with 4,300 metres drilled during the maiden drilling campaign in 2022.

Drill hole WWN22_017 intersects very thick manganiferous zones at Woodie Woodie North, Braeside West Prospect.

Accelerate managing director Yaxi Zhan said following the completion of drilling: “Phase 2 drilling continued the discovery success from Phase 1 drilling.

“Early encouraging results from two prospects - Dales Patch and Nathan’s Flat, confirm the near surface high grade mineralisation as well as potential for thicker mineralisation at depth.”

Element 25

Element 25 Ltd (ASX:E25) continued mining and processing operations at its 100%-owned Butcherbird Manganese Project in Western Australia during the quarter.

The company is planning to produce high-purity manganese sulphate monohydrate (HPMSM) from manganese oxide concentrates currently produced at Butcherbird.

A feasibility study to build an HPMSM production facility in the US is being undertaken.

Element 25 has already signed an offtake and project financing agreement with one of the world's leading automakers Stellantis N.V. for the supply of HPMSM from its proposed US-based processing facility.

The agreement combines take-or-pay offtake commitments for 45,000 tonnes of HPMSM from the facility over five years.

In the spotlight: ASX vanadium stocks

Australian Vanadium

Australian Vanadium Ltd (ASX:AVL) appointed Primero Group and GR Engineering Services to undertake Early Contractor Involvement (ECI) services for its Australian Vanadium Project in WA during the December quarter.

“Appointing Primero and GR Engineering in this ECI role is a key step forward for the project as we progress towards development and construction,” AVL managing director Vincent Algar said in December.

“These agreements are indicative of the level of confidence we have in progressing towards execution and will be pivotal in setting the foundations of key partnerships which are essential in ensuring the success of the project.”

AVL ended the quarter in a strong cash position of $27.2 million with no debt.

Surefire Resources

Surefire Resources NL (ASX:SRN) continued to receive assay results during the December quarter from its 5,188 metres RC infill drilling program completed at the Victory Bore-Unaly Hill Vanadium Project in Western Australia.

Three distinct parallel mineralised lodes have been identified, increasing the potential for a significantly larger resource:

• Lode 1 – Main Lode – up to 56 metres true width at up to 0.45% V2O5 (vanadium pentoxide);
• Lode 2 – Central Lode – up to 38 metres true width at up to 0.42% V2O5; and
• Lode 3 – West Lode – up to 60 metres true width at up to 0.23% V2O5.

The Victory Bore-Unaly Hill deposits contain more than 2.2 billion pounds of vanadium pentoxide, making this one of the largest vanadium resources in Australia.

Technology Metals Australia

Technology Metals Australia Ltd (ASX:TMT) announced a major milestone during the quarter with the execution of an MoU with leading Indian steelmaker, Tata Steel, regarding potential offtake of vanadium products.

The parties are also investigating downstream technical collaboration with scope for joint development of ferrovanadium production facilities as well as potential investment by Tata Steel into Technology Metals and/or the Murchison Technology Metals Project (MTMP).

The MTMP global mineral resource was upgraded to 153.7 million tonnes at 0.8% V2O5, including a measured and indicated component of 63.2 million tonnes at 0.9% V2O5, a 26% increase on the previous resource.

This upgrade is expected to result in an increase in proven and probable ore reserves and project mine life.

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