Focus Metals Inc (TSXV:FMS) and L’institut de recherche d’Hydro-Québec announced a licensing agreement enabling Focus to develop a graphite-purification facility and a graphite-anode production facility for lithium-ion batteries. Under the agreement, Focus will build new purification and production facilities, which the company will own and manage. IREQ will provide technical support and cooperate in future technology improvements.
Subject to positive economic analysis, the purification facility will produce up to 15,000 tonnes of spherical battery-grade flake graphite by 2015, using graphite from the company’s Lac Knife Project in Quebec. The anode facility will produce up to 5,000 tonnes of anodes. Costs of the facilities and financing have yet to be determined. The battery-grade process will be incorporated into Lac Knife’s PEA scheduled for June.
In exchange for the technology licence, technological support and future processing improvements, IREQ will receive a licensing fee over a three-year period, representing less than 10% of the current working capital, as well as a royalty on future sales. IREQ is recognized as a global leader in the development of advanced materials for battery manufacturing. It holds over 100 patent rights and 15 licences for battery materials used by some of the world’s most successful battery manufacturers and materials suppliers. IREQ also partners with private-sector companies to build electric-vehicle and hybrid-electric-vehicle charging stations.
Focus President/CEO Gary Economo tells ResourceClips.com, “Hydro-Québec has been engaged in the electric-vehicle sector for many, many years. They’ve developed these lithium-battery technologies with a couple of thoughts in mind. One was for hydro-energy storage, and the other was for the transportation sector. They’ve invested a lot of money in both areas. They had a company which was slightly ahead of its time in the electric-vehicle market. It ended up getting sold to a French conglomerate. Hydro-Québec also invested in motor drives for electric vehicles in a subsidiary called TM4 and a bunch of other investments. Their mandate is to advance the electrification of the transportation industry. They have major, major projects in that sector, as well as in energy storage and data transmission through powerlines, like the smart-grid program. They spend an awful lot of time, money and effort in advancing the use of hydro.
“We’re hoping the spherical-graphite production facility will open by the end of 2013. For the first 12 months, it would produce about 10,000 tonnes of 95% material. [The 2015 goal is 15,000 tonnes.] The production plant for anodes and the mine itself are targeted to open at the same time.
“I don’t think there’s a market for other graphite in batteries, apart from spherical graphite. Spherical graphite provides the best capacities and best performance for batteries. The market is constantly looking to improve performance, cost, weight, size and everything else.â€
Responding to a Reuters story that stated battery manufacturers prefer synthetic graphite, Economo says, “Synthetic graphite is being used in lithium batteries. Battery manufacturers need consistency from their suppliers. So when they say synthetic graphite is easier to control, I think they’re saying their suppliers are controlling the quality of the material from one batch to another. When you order natural graphite from a distributor, you don’t know what mine it’s coming from. There’s a variety of batches, and it’s very difficult for a battery manufacturer to maintain quality control. Synthetic graphite is a lot more consistent, so a lot of battery manufacturers have opted to use it, even though it’s two to three times more expensive. Those are the companies making very high-quality, high-end batteries. Companies like that are very excited to see people like us come into the market with a very large deposit so we can guarantee them a consistent supply of product.â€
Economo continues, “Graphite prices are not going to go through the roof. They’re stabilized; they’re going to run about $1,800 to $2,000 a tonne. Producing a tonne of 95% concentrate is expensive, if you have a low-grade deposit. We’re lucky that we have a 16% grade. Our cost to produce a tonne of 95% material is fairly low. It’s about $350 a tonne right now. So we have a huge margin available to us. That’s especially important because the price of graphite isn’t going to increase. The market can’t accept it. There is a demand for graphite and a need for it from lithium-ion battery manufacturers, but new mines will open to satisfy that demand. I don’t see prices rising.
“The automotive sector is one area we’re interested in, of course. But there are others we’re going after too. For example, two major growth areas are notebook computers and tablets. Until recently a lot of the batteries were ni-cad or nickel-metal-hydride. Now, with the ultra-thin, ultra-light computers and tablets, it’s all lithium. They’re looking at producing 450 million tablets in five years. The number is just astounding. If you look at electric handtools, every one of them is changing from nickel-metal-hydride to lithium-ion batteries. That’s another huge market. I went to the hardware store the other day to buy a lawnmower. They had five gas-powered models and seven electric.
“The automotive sector might not catch on as fast as some people think it will,†Economo cautions. “Personally I think it’ll take more time because to have that amount of vehicles on the streets you also need the infrastructure. If you go to China, India or Europe, you’ll see some of the motorcycles and even bicycles are electric. It’s mandated now in China that they can’t have any more gas-powered mopeds. So there’s a huge, huge market for graphite in the lithium-battery sector, even without the automotive industry. I think the automotive business will just be the icing on the cake.â€
Focus holds a 40% interest in Grafoid Inc, a joint venture created to find proprietary methods of manufacturing graphene from graphite mined at Lac Knife.
“It’s going really, really well,†Economo says. “Grafoid’s working on a number of projects for some major corporations in terms of R&D and developing patents and intellectual property. We need to prove the scalability of the process. A pilot plant is being built, and it will be ready and operable in five weeks. So as soon as we have the material from our drill program we’ll be able to get that plant going and prove the scalability of the manufacture of graphene. We make graphene now, but it’s in small batches in a lab environment. We want to scale it to large batches and see how big the batches can be.â€
The pilot plant’s location is secret.
“There are signs of industrial espionage,†Economo reports. “We’ve seen it, and we want to be extra careful. There are people out there who have tried, and will continue to try, to get trade secrets.â€
As for the Lac Knife Project, “Our PEA is scheduled for June 7. We don’t need a feasibility study. We’ll have offtake agreements and financing to take us into production. We’re working on five different companies for potential offtakes.â€
The company has additional claims in Quebec’s Tetepisca region and in the region of Timcal Graphite & Carbon’s Lac-des-ÃŽles Graphite Mine. “We have an exploration program in which geologists will visit all the claims, Economo says. “That starts next week. We have a big drill program starting next month up at Lac Knife. We want to see how big this thing is. It’s open at all directions and at depth. We also want to get some material because some of our potential clients will test it. We also want to have some material for our graphene development.â€
Focus Metals is changing its name to Focus Graphite.
“Our new name has been approved by shareholders. We’re just doing the paperwork and filing it with the exchange. So I would say it takes effect now.â€
Economo concludes, “Over the last couple of years we’ve de-risked and advanced this discovery to the point that, with our scoping study next month, we’ll be ready to go to permitting and take it to production. We’re well financed; we have $27 million in the bank. We’re an exceptionally advanced company with a business plan to take advantage of the upstream products, as opposed to just mining graphite and selling it in bulk. We want to take advantage of the value-add that we can bring to a particular customer. So our focus, no pun intended, is to provide customer solutions for technology graphite applications. We’re looking forward to our scoping study and signing our offtake agreements and getting the permitting done so we can get some graphite out of the ground.â€
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Source: http://business.financialpost.com/2012/05/14/electrifying-transportation-focus-ceo-gary-economo-on-quebec-graphite/
