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BATTERY MINERALS PREVIEW

Mineral Commodities is working towards production of a purified
product (99.95% TGC) from its Munglinup graphite project, Western Australia

MRC’s downstream dream

n paper, there is a lot to like about with a downstream strategy.” by potential downstream customers.”
Othe DFS which Mineral Commodi- Upon completing the DFS, MRC was To that end, MRC sees Skaland and
ties Ltd (MRC) released last month for its able to increase its ownership of Mung- Munglinup working hand-in-hand. With
90%-owned Munglinup graphite project, linup from 51% to 90% with an $800,000 the company now regularly liaising with
about 100km west of Esperance. payment and 30 million fully paid ordi- European-based customers over graph-
Among the highlights are a low capex nary shares issued to JV partner Gold ite products from the Norway operation,
of $US61 million, payback within three Terrace Pty Ltd. it will be at the front of the queue to rec-
years of first production and strong cash It was the second major milestone for ognise any increase in demand for po-
flow of $US240 million over an initial MRC in the past three months, having fi- tential material from Australia.
mine life of 14 years. nalised its acquisition of the 102-year-old MRC continues to work collabora-
The robust DFS outcomes were in line Skaland graphite mine in Norway at the tively with the CSIRO and Doral Fused
with MRC’s expectations following those beginning of October. Materials on the first Australian-based
outlined in a previously published PFS. Skaland – the largest flake graphite op- purification process using Munglinup
However, the company has long main- eration in Europe and the fourth biggest concentrate. The company also recently
tained the real opportunity for Munglinup outside of China – is the other crucial as- partnered with Norway-based battery
is best viewed as one side of a dual-as- set in MRC’s overall ambition to become cell developer FREYR over the supply
set downstream strategy. a key supplier of natural graphite to the and manufacture of anode material from
“Munglinup is essentially where we world’s emerging battery anode markets. Skaland.
started our journey in graphite,” MRC “For us, Skaland was the perfect segue Fox said the implementation of environ-
corporate development manager Peter given the fact it’s already in production, mental regulations in China was opening
Fox told Paydirt. and has well defined, well understood the door for production from non-tradi-
“Since we’ve taken on this project, markets for its production,” Fox said. tional graphite jurisdictions such as Aus-
we’ve learnt a lot about the market and “Our ambition is to use Skaland to de- tralia where a primary source is yet to be
we recognised there was going to be a velop our market profile and from there established.
lot of challenges in bringing a pure con- we can complete our strategy of optimis- “The Chinese have really focused on
centrate-only project into development in ing our concentrate and increasing our a lot of environmental practices around
the existing market as it sits today. production, then allocate that production mining and processing, so the playing
“The real opportunity for this project to our downstream processes and get field is becoming a lot more even now
will come when it’s looked at in concert our material into the market and have it and it’s creating a lot more opportunities
qualified. for countries like Australia,” he said.
Munglinup DFS “The big chal- “Add to that the murmurs of economic
lenge for new cold war and you’ve now got a number
Post-tax NPV: $US111 million ($160 million) concentrate pro- of western countries realising how highly
IRR: 30% ducers looking to reliant they are on Chinese supply for
Capex: $US61 million ($88 million) establish a down- crucial advanced materials and looking
Opex: $US491/t ($720/t) stream business at ways to diversify their supply.
“I think end-users are going to be very
is trying to sus-
Life-of-mine: 14 years tain cash flows welcoming of Tier 1 mining jurisdictions
Payback: 2.7 years to support your like Australia, where we have very high
Net cash flow: $US240 million ($352 million) operation [from standards of technical skills and sustain-
Processing: 400,000 tpa (years 1-6), traditional mar- able processes that ensure we’re reliably
500,000 tpa (years 7-14) kets], while also delivering high quality products.”
Production: 52,000 tpa needing to have – Michael Washbourne
Concentrate grade: >95% TGC your downstream
Reserve: 4.24mt @ 12.8% TGC production and
process qualified

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