A feasible Nouveau Monde Graphite plan
Study details economically viable supply of battery graphite Metal Tech News - July 6, 2022
Last updated 4/16/2023 at 7:05am
It is going to require enormous quantities of graphite for the lithium batteries powering the electric vehicle revolution, and Nouveau Monde Graphite Inc. has taken another step toward feeding North American EV supply chains with this critical battery anode material.
On July 6, the Canadian battery materials company unveiled the results of a feasibility study that demonstrates strong economics for its plan to build a graphite mine and a coated spherical graphite anode materials plant in Quebec.
Building upon a 2018 feasibility study that demonstrated positive economics of developing a mine at its Matawinie graphite project in Quebec, this updated study also considers the economic and technical parameters of building a graphite materials plant in Becancour, an area of Quebec that has been labeled "Battery Valley" due to the number of automotive and battery materials companies setting up facilities there.
Further details on Becancour and the companies that are developing battery materials facilities there can be read at Lithium Battery Valley emerges in Quebec in the March 16, 2022 edition of Metal Tech News.
The advanced graphite materials processing plant Nouveau Monde is developing in Battery Valley will upgrade an estimated 103,328 metric tons of high-purity flake graphite concentrate to be produced at Matawinie each year into 42,616 metric tons of the coated spherical anode material for lithium-ion batteries and 3,007 metric tons large flake graphite for other industrial purposes.
"We have come a long way from our initial Matawinie Mine project to develop an integrated operation tailored to the market's technical requirements and sourcing strategy," said Nouveau Monde Graphite President and CEO Eric Desaulniers.
This new study for an integrated battery anode supply chain in Quebec comes at a time when EVs are driving massive new demand for graphite. It is currently expected that the lithium battery gigafactories being erected around the globe will need about 7.67 million metric tons of graphite per year by 2031; this is more than a five-fold increase over the 1.24 million metric tons that went into batteries last year.
According to the U.S. Geological Survey, only about 1 million metric tons of graphite was mined last year, which means that it would take roughly 60 Matawinie-sized mines to produce the graphite required for EV batteries in less than a decade.
Above and beyond the sheer volume of graphite that is needed, China accounted for roughly 82% of graphite mined and nearly 100% of the graphite anode material produced last year. This has North American and European automakers looking for projects that will diversify and shorten the supply chain for the graphite anode materials required for the growing line of electrified models rolling off assembly lines.
Nouveau Monde's plans to develop both a mine and battery anode processing facility in Quebec will provide one such option that is less than 500 miles from major automotive assembly plants in the U.S. and Canada.
"NMG is positioning itself as North America's largest, fully integrated natural graphite production to relieve battery and EV manufacturers from their overreliance on Chinese production," said Desaulniers.
In addition to shortening the supply chain by at least 6,000 miles, the graphite anode material to be produced by Nouveau Monde offers some major ESG perks that can be passed on to environmentally and socially conscious automakers and the buyers of their EVs.
Above the normal advantages that come with mining and producing battery materials under the environment and labor laws of a country like Canada, Nouveau Monde is leveraging the abundance of hydropower to produce carbon-neutral graphite anode material.
The company has even gone so far as to forge a partnership with global heavy equipment manufacturer Caterpillar to develop the first generation of battery-electric trucks and excavating equipment for the Matawinie Mine.
"The collaboration between Caterpillar and Nouveau Monde marks an important milestone in the mining industry," Caterpillar Group President Denise Johnson said last year when the partnership was announced. "Through integrated technology, machines and services, the entire Caterpillar team is proud to support Nouveau Monde as they work towards constructing and establishing their first zero-emission mine."
The net-zero-carbon mine and battery materials plant detailed in the feasibility study are expected to cost C$1.4 billion (US$1.1 billion) in capital to build and about C$195 million (US$149 million) per year to operate in today's inflationary environment.
Over the course of 25 years, this integrated mine and processing facility will generate an after-tax net present value (8% discount) of C$1.58 billion (US$1.21 billion) and an after-tax internal rate of return of 21%. It is expected to take about 4.2 years to pay back the capital expenses to develop these operations.
"Market trends have accelerated in past months and while inflation and logistics turbulences present a more challenging environment, we have demonstrated our graphite expertise, advanced manufacturing capacity and complex project management skills to execute our vision of an integrated green anode material production," said Nouveau Monde Graphite Chair Arne Frandsen. "The successful upstream integration is designed to ensure that we have access to high-quality, responsible feedstock for decades to come, and provides battery and EV manufacturers with the assurance of a traceable, local, and carbon-neutral supply."
With the feasibility study showing that the Matawinie Mine and Becancour Battery Material Plant are economically viable, Nouveau Monde's next steps are to secure project financing and advance commercial discussions with a view toward securing an anchor customer agreement with potential financial participation.
Once financing and an anchor customer is secured, the company says its Matawinie Mine and Becancour Battery Material Plant could begin delivering commercial-scale quantities of graphite anode material into North American lithium-ion battery supply chains in about 2.5 years.
"With attractive economics, strong ESG credentials, demonstrated execution capacity, and high-purity advanced materials, we are set to provide a turnkey large-scale solution for the booming local battery value chain," said Desaulniers.