Valence Industries said Tuesday that pending approvals from the South Australian government, it will soon be restarting production at the past-producing Uley graphite mine.
The company announced in a Tuesday press release that pending approvals from the South Australian government, it will soon be restarting production at the past-producing Uley graphite mine. The mine, which began putting out material intermittently in the 1920s, was closed back in 1993 due to low graphite prices caused by Chinese oversupply, Australian Mining states.
With graphite back in favor, Valence moved in on the mine, and over the past year has completely refurbished the mine site and surrounding infrastructure. According to Tuesday’s release, “new equipment is in place to allow Phase 1 production to commence shortly.”
During that phase, stockpiled graphite left behind from the mine’s closure in 1993 will be processed, with the company then moving on to processing material from the new Uley Pit 2. Currently stockpiled graphite comes to a total of 10,900 tonnes, while the mine contains an additional 360,000 tonnes. That said, Valence has reportedly been exploring at Uley with good results — it’s discovered “a new globally unique flake graphite area with grades of more than 60% and found near the surface.”
In terms of where all its graphite will be going, Valence CEO and Managing Director Christopher Darby said Tuesday that the company has “already signed multiple memoranda of understanding to supply over 29,000 tonnes of graphite per year over the next two to three years.”
Impressively, Valence has taken only about a year to get to this point. A BRW article published in August states that the company was spun out of Strategic Energy Resources (ASX:SER) in late 2013 before listing on the ASX itself in January.
The company’s future looks similarly bright, with a revised feasibility study for Phase II operations due out by the end of 2014. Phase II will involve a new open pit and a new AU$35-million graphite processing plant that in combination with Phase I components will allow the company to ramp production up to 50,000 tonnes of graphite a year.
Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.