Northern Graphite agrees deals for assets in Québec and Namibia

TSXV-listed Northern Graphite is set to become the third largest natural graphite producer outside of China after agreeing deals to acquire two producers for a combined cost of US$55 million.

The company is purchasing the Lac des Iles mine and mill in Québec and all the outstanding shares of Imerys Group, which owns the idled Okanjande project in Namibia. The deals will give Northern Graphite an additional 40,000 to 50,000 tonnes of graphite concentrate production capacity.

The Lac des Iles mine, located 180 km Northwest of Montreal, has been in production for more than 20 years and It will produce up to 15,000 tonnes per year over the next three years. There are opportunities to expand this annual production sum, Northern Graphite noted.

Meanwhile in Namibia, the company will own the Okanjande graphite deposit and the idle Okorusu fluorspar mill, which Imerys refitted to treat graphite-bearing ore. Northern Graphite plans to invest $7 million on plant modifications in order to reach an annual production figure of 30,000 tonnes of graphite concentrate.

Graphite is viewed as a strategic critical mineral with demand set to dramatically increase from the battery industry, particularly those made for electric vehicles. Tesla is reportedly looking to source concentrate from one of the world’s largest graphite mines in Mozambique, as it looks to diversify its supply outside of China.