Lincoln fast-tracks to South Australian graphite production

In a staged development strategy, Lincoln Minerals is supercharging its efforts in South Australia to become the first company to reboot the nation’s graphite production, targeting a 2 million-tonne high-grade core zone at surface at its Kookaburra project (KGP) on the Eyre Peninsula.

The company launched a prefeasibility study (PFS) in May to start exploring the economics of developing a mine capable of turning out high returns, even in a low graphite price environment.

Lincoln Minerals is looking to become the first company to reboot graphite production in Australia from its Kookaburra project in South Australia.

The KGP, which sits on the southern tip of the picturesque Eyre Peninsula, is host to 12.8 million tonnes grading 7.8 per cent total graphitic content (TGC) and includes the high-grade core zone of 2Mt at 15.2 per cent TGC.

The decision to move towards a staged development has come about after recent internal working group sessions and analysis, which included some of the key personnel from an earlier 2017 feasibility study, crunched the numbers and determined that the approach was the optimum strategy.

‘It is clear to me that … Lincoln is likely to be able to generate attractive returns, even at low graphite prices.’

Lincoln Minerals chief executive officer Jonathon Trewartha

As a result, Lincoln will initially target phase-one production of 20,000 tonnes per annum of high-grade graphite that will generate sufficient free cash flow to ramp up to 75,000tpa in subsequent years as the mine expands. According to the company, KGP is in a unique position, primarily due to three key features.

Firstly, the high-grade core zone at surface that requires zero pre-strip is likely to involve lower operating costs and subsequently higher margins. Secondly, an existing mining licence over the project will speed up the development process, especially as the 2017 study involved substantial project-related workstreams and studies.

In tandem with the previous work done at the site, a draft environmental protection and rehabilitation program has already been prepared and can be dusted off to quickly help the completion of any other remaining approval requirements.

And thirdly, the KGP is in proximity to roads, recently-upgraded port infrastructure and plentiful power options, including 2200 megawatts of renewable energy.

Lincoln Minerals chief executive officer Jonathon Trewartha said: “As an experienced mining project developer, it is clear to me that with a Mining Lease already approved and developing such high grades at the front end of the production schedule, means that Lincoln is likely to be able to generate attractive returns, even at low graphite prices.”

The main source of graphite demand in recent years has been through the development of a booming electric vehicle (EV) market. The metal is incorporated into the electrodes of lithium-ion batteries to increase electrical conductivity.

Now regarded as a critical metal, the western world is increasingly looking for material it can source outside of China, which controls 77 per cent of global production.

Intriguingly, a recent 20 per cent pricing premium for material sourced from outside of China has developed. Experts believe it is set to continue and that could provide Lincoln with further encouragement to get going as soon as possible.

Lincoln is in a remarkable position to be able to capitalise on the burgeoning demand for graphite as it moves forward with fast-tracking its plans. If successful, it will win the race to become Australia’s first modern producer of graphite from the KGP, with further plans for future expansion.

The company has revealed clear intentions to be shovel-ready as soon as possible and appears to be pushing hard to win first-mover advantage to produce a graphite concentrate that can be directly utilised downstream –particularly for the growing EV market.

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