March 16, 2011
Mine back on the table
by Vance Gutzman
There's lead in them thar hills, or graphite, actually, and they're
taking another kick at the proverbial can to extract the precious
commodity.
The on-again, off-again graphite mine in Bissett Creek may be on again,
according to information presented by area economic development officer
John Walden.
Walden presented Deep River council members with an update from a
meeting he attended last month in Pembroke.
The meeting, Walden said, was the beginning of the consultation
and licensing process for the development of a graphite mine in Bissett
Creek.
Talk of opening a graphite mine in Bissett Creek has been in the works
for many years now, and the last time the NRT took a tour of the site
and wrote a story associated with it was way back in 2002.
At that time, the site (located about 15 km in from Highway 17) was
being developed by Industrial Minerals Canada Inc.
The current proponent of bringing the mine on-line is a company called
the Northern Graphite Corporation - a private Canadian company which is
51 percent owned by Industrial Minerals.
It's been estimated that the Bissett Creek site (one km wide by three
km long) contains 14.6 million tonnes of what is known as 2.24 percent
graphitic carbon, with additional inferred resources of 18 million
tonnes of 2.21 percent graphitic carbon.
Call it what you want, but graphite is in big demand these days,
according to Northern Graphite's website.
Traditional demand for graphite has been largely tied to the steel
industry: as a liner; a component in the bricks which line furnaces and
as an agent to increase the carbon content of steel.
It's also been in demand by the automotive industry, which uses the
mineral in brake linings, gaskets and clutch materials.
But a bigger demand for graphite will be driven by "green" initiatives,
according to Northern Graphite, which says the mineral is much sought
after these days for use in the manufacture of lithium ion batteries,
fuel cells, semi-conductors and pebble bed nuclear reactors.
The global graphite market, the company says, exceeds 1 million tonnes
per year, and the Bissett Creek site should be able to get its foot in
that door.
That's because China, which currently produces 80 percent of the
world's supply, is both running out of its graphite supplies and
tightening its labour and environmental standards.
"China has now instituted export duties and licences, which is creating
serious supply concerns for the rest of the world," Northern Graphite
states.
"The supply of large flake, high carbon graphite is tight."
The company goes on to state that one of the reasons the Bissett Creek
mine hasn't yet reached production levels is that Chinese producers
dumped large quantities of graphite on the world market in the 1990s,
which meant prices for the mineral came crashing down from $1,300/tonne
(US) to as low as $600/tonne.
Graphite prices started recovering in 20o5, however, and Northern
Graphite now says the mineral is selling for up to $2,000/tonne, and
prices are expected to remain at a premium.
"Events of the 90s are unlikely to be repeated due to the growth in the
Chinese domestic steel industry," Northern Graphite states.
"Furthermore, Chinese graphite is declining in quality and costs are
increasing, due to the effects of high grading and to tightening labour
and environmental standards."
Northern Graphite says a drilling program is currently underway to
confirm past results at the Bissett Creek site and a production
decision could be made later this year.
"The environmental and mine-permitting process has been initiated, and
will be completed later in 2011, following which the company will be in
a position to begin construction, subject to financing," Northern
Graphite states.
The key word may be "financing," for Walden said last week the company
needs to come up with between $60 to $70 million in financing to get
the project off the ground and the graphite out of the ground.
"That will be the reason it won't happen if it doesn't," Walden said,
adding that he's optimistic after having met with Northern Graphite
officials.
"They're an experienced group. They know that they're doing." Walden
said.
"They understand the hoops. They have jumped through them before."
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