Gratomic CEO Arno Brand and COO Armando Farhate: Graphite Production in 2020

Gratomic (TSXV:GRAT) President and CEO Arno Brand and COO Armando Farhate provided the Investing News Network’s (INN) investor audience with insight into the company’s plans to bring the Aukum graphite project in Namibia into production in 2020.

Gratomic’s flagship Aukam graphite project is located in Southern Namibia, a mere 90 minute drive from the local port of Luderitz. Aukam is a high-grade crystalline vein graphite asset that hosts visible surface graphite identified over 15 kilometers of strike.

“Formerly, we’ve only seen these assets mined in countries such as Sri Lanka. The majority of the world’s vein graphite came from Sri Lanka for many, many years,” explained CEO Arno Brand. “This is one of the very few vein graphite assets that have been discovered and in the process of being put into production outside of Sri Lanka.”

Gratomic has successfully tested Aukum graphite in a number of high-value applications, and is now on the path to production at the 20,000 tonne per annum processing facility now under final construction. “Most of the key milestones to be able to start commissioning the plant have already been completed and now we are in the final stages. So, we expect to be able to start commissioning by the end of 2020,” COO Armando Farhate told INN. “Certainly, in the beginning of 2021 we will achieve our 20,000 per annum capacity production.”

Because of their dedication to environmentally friendly mining, Gratomic has developed a processing method that produces a high-grade end product without having to use chemical treatments.

Gratomic’s ability to start producing cleanly-sourced, high-grade graphite in 2020 places the company in an ideal position to take advantage of expected rising demand from the electric vehicle market. “2020 is a year that is definitely going to be remembered for many important projects on the electric vehicle front. Automakers are making deals to secure raw material,” said Farhate.

Farhate points out that the lithium-ion batteries that power electric vehicles actually hold more graphite than lithium in terms of mass, “So, the demand for graphite in order to build the new lithium ion batteries for this electric vehicle fleet is about to become huge.” In addition to the battery market, he also sees plenty of demand coming from the steel sector, another important market for graphite.

Moving forward, Gratomic plans to continue building out its team to best go after not only the battery sector and traditional markets for graphite, but also emerging high value applications for the material such as electronics, fire protection and military applications.

Read on below for the full transcript of the interview with Gratomic CEO Arno Brand and COO Armando Farhate. 

Investing News Network: Can you provide us with an overview of Gratomic and the Aukum graphite project in Namibia?

Gratomic CEO Arno Brand: Gratomic’s key focus right now is expediting the development program on its Aukum graphite project in Namibia. It is is a very rare, high grade vein type deposit. Formerly, we’ve only seen these assets mined in countries such as Sri Lanka. The majority of the world’s vein graphite has come from Sri Lanka for many, many years. This is one of the very few vein graphite assets that have been discovered and in the process of being put into production outside of Sri Lanka. Currently, I would say we’re about 90 percent on track to complete our 20,000 tonne per annum processing facility. As soon as we are done with the current construction phase, we’ll be heading into the commissioning phase, which would start delivering product in small quantities, initially ramping up towards the end of commissioning, and then full commercial production as soon as possible.

Investing News Network: What is the timeline to bring Aukum into production?

Gratomic COO Armando Farhate: We are more or less 90 percent complete on installation of our plant. Most of the key milestones to be able to start commissioning the plant have already been completed and now we are in the final stages. So, we expect to be able to start commissioning by the end of 2020. Certainly, in the beginning of 2021 we will achieve our 20,000 per annum capacity production.

Investing News Network: Taking a step back into the graphite sector in general, what what makes graphite an important investment trend in 2020?

Gratomic COO Armando Farhate: 2020 is a year that is definitely going to be remembered for many important projects on the electric vehicle front. Automakers are making deals to secure raw material, Tesla making this huge new factory, as well as Tesla’s new factory in China starting to deliver vehicles. What many people don’t really realize is that when you talk about the lithium ion battery, they call it “lithium ion” because the lithium-let’s say the active material on the cathode, but in terms of mass, it holds a lot more graphite inside. So, the demand for graphite in order to build the new lithium ion batteries for this electric vehicle fleet is about to become huge. The growth rate is definitely growing in an exponential rate, the demand for electric vehicles and in consequence, the demand for graphite. This is, I would say, the fastest growing market for graphite. However, graphite is present in many other markets like the steel segment that uses graphite steadily. This is a segment that had its bumps in 2020, with COVID, but it’s never going to slow down and there is a steady demand growth. Those are only two examples of markets that demand graphite, and that will grow or continue to be present. This will keep the demand for graphite in a growth curve for a long time. It’s not going to fall, and it’s not even going to stabilize in the foreseeable future.

Investing News Network: Can you tell our investor audience about your vision of environmentally responsible graphite production?

Gratomic CEO Arno Brand: We are all one part of one big planet Earth, essentially, and I believe every single one of us has a responsibility to develop our commercial activities in an environmentally conscious manner in order to preserve what we have for future generations. This has been a primary focus for Aukum. The day we walked onto this project, our vision has always been, how do we build a process that has a negative footprint, one where we we can comfortably go to bed at night, knowing that we took every single step in our ability and capability to reduce that impact on our surroundings.

We do have the luxury of a high grade product, but we spent many, many hours and almost a year perfecting our grinding circuit to the point where we were able to liberate the material properly, in order to avoid having to use any acid or chemical treatment on the processing plant. This is a very rare case and most graphite mines are required to use chemical processes or heat treatment processes in order to upgrade the graphite. We took our time, and really delved into the mechanics of our graphite order to understand how to liberate it to a point where we’re able to, through flotation and air classification, take our product and produce it in a way where we’re getting a very high grade end product without having to use all those environmentally deleterious processes that most other companies use in the industry. That, of course, transfers to our end users at the end of the day. They can now finally say that they have a clean source of carbon that is coming from a mine that actually really cares about what it’s doing to the environment.

Investing News Network: What’s next for Gratomic?

Gratomic CEO Arno Brand: We’re going to continue building out this mine. As we are coming into the commissioning stage and close to full production capacity, we’re going to continue adding, world class people to the team and we’re going to fill our book, in terms of our production capacity to a comfortable, reasonable level of comfort, that we think we can achieve as we’re commissioning. We are going to continue working to hit the highest value applications available to us in the market. Given that we’re able to produce a pristine graphite product, this opens doors to a lot of really high-end applications that we can have, where we can expose our shareholders. It’s all about building a cash flow positive business that can sustain any economic cycle; we’re going to continue bringing down our costs wherever we can and we’re going to promote sustainability, continue working in an environmentally friendly manner so that we can preserve what we have for future generations.

Gratomic COO Armando Farhate: We will start developing the applications that are more straightforward, and that have more potential for growth. We will definitely go after the EV market or the battery market in general and also our tools and electronics; there are a lot of applications for batteries that will only grow. As a next step, for example, on the expandable graphite market, we already have some preliminary testings done on our graphite, that shows that it has good potential for expansion. This also opens the doors for us in the future, for markets like fire protection in the civil construction market that also uses graphite as a sealant for fireproof doors.