Valence Industries will open Australia’s only graphite mine in March and it couldn’t come at a better time for the company thanks to a decision by the Chinese government to crackdown on exports.
Valence Industries will list on the stock exchange on Jan. 6 after raising nearly $7 million of capital to reopen the Uley Graphite Mine, 23 km from Port Lincoln in South Australia.
Chief executive Christopher Darby said that there had been a “double uplift” to the market with reduced supply and increased demand, The Australian reported.
The mine was mothballed in 1993 after the large volume of graphite exports coming from China made it uneconomic to do business in Australia.
China produces about 75 percent of the world's graphite, but last month ordered a reduction of up to 10 percent of global supply coming from its graphite-producing regions on environmental grounds.
With Chinese government restrictions on graphite exports and high demand from hi-tech industries, Valence Industries will reopen its processing plant and mine to produce up to 60 kt/a.
“There has been quite an adjustment from the Chinese in terms of their exports, but at the same time there has been a significant increase in global demand through industrial applications but also new hi-tech applications,” Darby said.
The hi-tech boom has renewed demand for graphite for use in computer chips and electronics.