March 3, 2017 / 8:46 AM / 6 months ago

Australia's Graphitecorp thinking big after expansion into battery industry

MELBOURNE (Reuters) - Graphitecorp is hoping its expansion into the lucrative lithium battery industry will be a new chapter for the Australian-listed firm, transforming itself from a raw mineral supplier to an anode manufacturer, its managing director told Reuters.

After a successful A$15.5 million ($11.72 million) capital raising, the company announced on Thursday that it had completed its acquisition of Tennessee-based battery materials firm Coulometrics, and purchase of a majority stake in Canadian startup Novonix.

"We've spent a lot of time studying the whole graphite market and it became clear to us the biggest opportunity was the value added in turning to anodes for batteries," Managing Director Philip St Baker said on Friday.

With its purchase of Tennessee-based Coulometrics, the company plans to build by year-end an anode production facility with a capacity of 1,000-tonnes a year, he said.

Anodes, made of 95 percent graphite, are key parts of lithium batteries, which are increasingly being used to power vehicles, consumer electronics and as storage for renewable energy.

"What we are doing with these transactions is moving from source to manufacturing of the finished product, which will be a combination of natural and synthetic graphite," he said.

The group plans to first focus on smaller volume U.S. customers.

"We do not expect to sign any larger sales contracts until we have demonstrated that we can commercially produce with zero defects over a period of time," he said.

St Baker said that one of the main attractions in the deal is that Graphitecorp already has its own deposits of graphite, which are mainly found in China.

The group expects to complete a feasibility study at its high-grade graphite deposit in North West Queensland by the end of June, which could potentially supply all of the Tennessee facility's anode needs.

Graphitecorp also bought a two-thirds stake in Novonix, a battery technology testing firm that counts Panasonic among its clients. China's battery maker Contemporary Amperex Technology Co Ltd (CATL) also holds a stake.

Graphitecorp hopes to use the new relationship with CATL to grow its business.

CATL tripled its production capacity for lithium-ion car batteries last year and plans to grow its battery capacity sixfold by 2020 to 50 gigawatt hours, which could put it ahead of Tesla Motor Inc's Gigafactory in Nevada.

CATL in January bought a 22 percent stake in Finnish auto supplier Valmet Automotive to expand in the European electric car market.

Reporting by Melanie Burton; Editing by Randy Fabi

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