Metals Australia Signs MOU to Develop Graphite Project in Canada

Diversified miner Metals Australia (ASX:MLS) has signed a non-binding memorandum of understanding with graphene and battery producer Weihai Nanhai Carbon that will allow the company to develop its graphite asset in Canada.

The Chinese company will receive preferential supply options and in return it will help finance the Lac Rainy project in Quebec, Metals Australia said in a statement on Wednesday (June 20).

“A strategic alignment with a leading graphene and battery bipolar plates producer at this juncture will guide the company in tailoring the continued exploration and development of the high-grade Lac Rainy graphite project,” Gino D’Anna, director of Metals Australia, said.

At full capacity, Nanhai requires approximately 90,000 tonnes of graphite concentrate feed per year. The company has agreed to assist Metals Australia in the downstream processing design to produce graphite that meets the requirements of the market.

The Chinese company will also receive samples from the Lac Rainy project to evaluate the potential development of spherical graphite, a key component in lithium-ion batteries used to power electric cars.

“Securing a significant partner like the Nanhai Group will also provide the company with future direction on its feasibility studies beyond graphite concentrate production, as we look to maximize value and minimize market risk through the investigation of downstream processing opportunities with an experienced technical and potential financial cornerstone partner,” D’Anna added.

Under the deal, Nanhai will also support the Australia-based company in the production of a graphene product using graphite concentrate from Lac Rainy. Graphene is a powerful electricity conductor, which could boost the lifespan of lithium-ion batteries.

The deal is for an initial term of 12 months, which can be extended by mutual agreement.

Aside from developing the Lac Rainy graphite project, Metals Australia is exploring for zinc and other base metals in Western Australia, lithium in Canada and uranium in Namibia.

On Wednesday, shares of Metals Australia closed at AU$0.005.

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Securities Disclosure: I, Priscila Barrera, hold no direct investment interest in any company mentioned in this article.