Sri Lanka’s diversified Conglomerate LOLC Holdings PLC has entered into MOU with Vancouver-based Ceylon Graphite Corp. to jointly develop at least three new graphite mines and to set up a state-of-the-art graphite processing facility in Sri Lanka with an objective to capture global Battery Anode markets by producing a minimum of 50,000 – 100,000 tonnes of quality spheronized graphite per year.
Ceylon Graphite’s subsidiary, Plumbago Refining Corp B.V. signed an MOU on 30th of June 2021 with LOLC’s subsidiaries, LOLC GEO Technologies Ltd. (“LOLCGT”) and LOLC Advanced Technologies Ltd. (“LOLCAT”) to work together to develop new graphite mines outside of the existing portfolio and to construct and operate a state-of-the-art graphite processing facility in Sri Lanka.
“We’re delighted LOLC is eager to support the joint venture’s technical strategy to produce a minimum of 50,000 to 100,000 tonnes per year of unparalleled quality spheronized graphite for the rapidly growing anode applications market as well as to collaborate with us and share successes in the graphene production technology,”said Don Baxter, CEO of Ceylon Graphite.
Under the MOU, Ceylon Graphite plans to purchase a 10 percent interest in LOLCGT with an option to buy up to 40 percent of the company. LOLC intends to purchase up to an aggregate of 15 percent stake in Ceylon Graphite either as a lead order on future financing or under separate terms with timing and terms to be detailed in a definitive agreement.
The MOU provides for Ceylon and LOLC to develop and operate a minimum of three mines on grids located near the State-owned Kahatagha Mine, an area known to be rich in high-grade vein graphite, as high grade as 98% Cg.
“The development of the new mines will be funded on a pro-rata basis, will be operated by Ceylon, and Ceylon will agree to offtake all mine production for further processing,” the company said.
Ceylon Graphite and LOLC will also construct an in-country value-add facility to upgrade the mine product further to 99.99% purity, ready for spheronization. This mine production will be in addition to Ceylon’s existing and planned mining operations at K1, M1, H1, P1 as well as six other potential sites under development.
Both parties also agreed to cross-appointments of designates to their respective corporate boards.
“LOLC is pleased to partner with a well-established graphite production company like Ceylon. Together we can work to capture a greater share of the world’s battery anode and graphene applications markets than we can working separately. This will benefit both our companies as well as the people of Sri Lanka in a significant way,” said, Danesh Abeyrathne, CEO of LOLC AT.
As the MOU is non-binding which signals the intent of both parties to negotiate in good faith a definitive agreement to reflect the intent and content of the MOU, there is no assurance that such an agreement will be reached.
Ceylon Graphite is a public company listed on the TSX Venture Exchange that is in the business of mining for graphite, and developing and commercializing innovative graphene and graphite applications and products. Graphite mined in Sri Lanka is known to be some of the purest in the world and has been confirmed to be suitable to be easily upgradable for a range of applications including the high-growth electric vehicle and battery storage markets as well as construction, healthcare and paints and coatings sectors.
The Government of Sri Lanka has granted the Company’s wholly-owned subsidiary Sarcon Development (Pvt) Ltd. an IML Category A license for its K1 mine and exploration rights in a land package of over 120km². These exploration grids (each one square kilometer in area) cover areas of historic graphite production from the early twentieth century and represent a majority of the known graphite occurrences in Sri Lanka.