JV looks to build UK graphite processing plant

London-based critical minerals incubator Alkemy Capital Investment has signed a non-binding memorandum of understanding (MoU) with miner Syrah Resources to establish a joint venture (JV) to develop a commercial-scale natural graphite active anode material AAM processing facility within the Teesside freeport area in the northeast of England.

The JV aims to supply AAM to the European market, but having processed AAM on its doorstep could be a particular boon for firms developing gigafactories in the UK itself. China's Envision AESC is expanding its existing site on Sunderland, close to Teesside, while India's Tata Motors has committed to a new battery plant in southwest England.

Syrah and Alkemy subsidiary Tees Valley Graphite (TVG) intend to enter into a binding JV agreement in the near future. Each will initially have a 50pc interest in the JV.

The Wilton AAM facility would be supplied with natural graphite from Syrah’s Balama graphite project in Mozambique, which Alkemy says is the world’s largest integrated graphite operation. It aims to have initial production capacity of 20,000t/yr of AAM, with potential for further expansion.

The project aims to accelerate first production by replicating and upscaling the technology and design used at Syrah’s Vidalia AAM facility in Louisiana. It is expected to be financed at project level through green bonds — for which accreditation will be sought — combined with a mix of debt, strategic equity finance and grant funding via domestic UK and accessible international programmes.

China fears

Intelligence firm Fastmarkets predicts graphite demand will increase from around from c.1mn t in 2022 to c.6.5mn t by 2033. Recent regulatory changes in China restricting graphite exports will “amplify the demand potential, signalling a promising future for graphite and AAM producers ex-China”, Alkemy says.

“We believe that the evaluation of the Wilton AAM facility is a very timely development as UK and European customers grow increasingly concerned over potential future supply shortages, especially in light of the recent export restrictions imposed by China,” says TVG director Kien Huynh.

“We are very pleased to be entering into this MoU for a JV with Syrah, which brings together Alkemy’s development expertise at Wilton with Syrah’s world leading graphite development, operations and sales expertise, to access the UK and European markets with a low carbon AAM product,” he continues. Alkemy is already the owner of the Tees Valley Lithium project within the freeport area.