Volkswagen Order $48 Billion In Batteries, That’s A Lot Of Graphite!

By Patrick Nelson | More Articles by Patrick Nelson

Shockwaves were echoed last week at the Volkswagen annual shareholder meeting when it was announced that the German carmaker had signed orders for $48billion (USD) worth of electric vehicle batteries.

“By 2020 we will offer our customers more than 25 new electric models and more than 20 plug-in hybrids,” said CEO Herbert Diess.

“In just a few years’ time, then, across all brands and regions, we aim to put the world’s largest fleet of electric vehicles on the road.”

This strategy will be powered by lithium-ion batteries and poses Volkswagen as a major player against Tesla who have until now, dominated the electric vehicle headline space.

As competition in the electric vehicle space continues to grow, one material flying under the radar is graphite. Tesla founder Elon Musk has stated that lithium-ion batteries “should be called nickel graphite batteries” because the batteries use ten times the amount of graphite as they do lithium.

Having commenced an aggressive drill schedule after listing publicly in January 2018, BlackEarth Minerals (ASX: BEM) are on track to announce their maiden resource by mid-2018 at their Maniry graphite project in Madagascar. This will be followed up by an aggressive development schedule which has them scheduled to deliver a scoping study by the end of 2018.

Already possessing a portfolio of prospective graphite assets, the timing of BlackEarth’s listing and project plans align noticeably with the production timelines at Tesla and Volkswagen when demand for graphite is forecast to grow further.

With graphite coming in different shapes and flake sizes, BlackEarth Minerals has specifically identified the more profitable large flakes at Maniry which subsequently received priority when a preliminary mineralogical report confirmed the clean and coarse flake nature of the graphite.

Differences in quality across the spectrum of graphite types means that the type required for automotive grade batteries is limited and the supply scarce. This is one of the reasons Volkswagen is moving now to secure supply with manufacturers, whilst Tesla’s solution is to build gigafactories where graphite will be their largest raw input material.

As assay results from BlackEarth’s Maniry project start filtering through in the coming weeks, the Company’s aggressive drill schedule has them on track to announce their maiden graphite resources by mid-2018 as the world gears towards electric vehicle adoption and battery manufacturers are lining up to secure graphite.

*OzFinancial are paid a retainer for assisting BEM with their Private Investor Management

Patrick Nelson

About Patrick Nelson

Patrick is the founder of Reach Markets and one of the founding partners of OzFinancial Australia. His passion is to educate and empower self-directed investors, by cutting out the middle men, reducing costs and providing the tools and support people need to be successful. Working closely with the ASX, Patrick writes and delivers educational content, as well as presenting at the ASX roadshows.

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