South Star eyes faster ramp up of Brazil graphite mine (updated)

South Star Battery Metals

20/10/2023 23:18

(Adds comments from CEO, industry groups and share performance)
    By Fabio Teixeira
       RIO DE JANEIRO, Oct 20 (Reuters) - South Star Battery
Metals  STS.V  is looking into a faster ramp up of its Brazilian
graphite mine, CEO Richard Pearce told Reuters on Friday, after
China said it will require export permits for the key ingredient
in electric vehicle batteries.
    "One of the scenarios, given everything that is going on in
the world, is skipping Phase 2 and going straight to Phase 3,"
said the chief executive of the Vancouver-based miner. 
    That would take the Santa Cruz project's output to 50,000
metric tons annually, from 5,000 metric tons in Phase 1, which
is due to start commercial production in January.
    South Star is one of several miners racing to ramp up new
graphite projects to secure supplies for the next generation of
electric vehicles – efforts that took on a new sense of urgency
with China's export controls.
    Pearce called the developments a "wake-up call that the
lithium-ion battery isn't just lithium."
    "Nobody could care less about graphite five years ago, much
less a week ago and now suddenly," he added, "there's a little
bit of wind at our back."
    Shares of South Star jumped 24% on Friday.
    The miner's current schedule for the Santa Cruz project in
Brazil calls for two years in Phase 1, followed by two years in
Phase 2, producing 25,000 metric tons annually, before reaching
Phase 3.
    In an accelerated scenario, the firm could hit 50,000 metric
tons about two and a half years after Phase 1, Pearce said.
    The project's ramp up to 50,000 tons could make Brazil the
biggest producer of graphite outside China, said Luiz Mauricio
Azevedo, president of the Brazilian Association of Mineral
Research and Mining Companies.
     Brazil ranked third in graphite production in 2021, with a
6.7% share, behind China and Madagascar, according to data
gathered by industry group Ibram, which represents multinational
and large domestic mining firms operating in Brazil.

 (Reporting by Fabio Teixeira; Editing by Brad Haynes and Daniel
Wallis)
 ((brad.c.haynes@tr.com; +55 11 5644 7725;))