A study commissioned to give the full picture of the economics of the Alabama Graphite plant in Kellyton has been delayed as mining company Westwater Resources considers increased production of battery-grade graphite for electric vehicles.
The definitive feasibility study, or the process of "taking your original concept and plan and running all of the numbers to make sure it's workable," Westwater president and CEO Chris Jones told The Outlook earlier this year, was originally due by Oct. 1, but on Tuesday the company pushed that deadline back.
The delay comes down to Westwater's decision to widen the scope of the study, given "rapidly growing interest in greater amounts of battery-grade graphite for electric vehicles," the company said in a press release Tuesday.
The original plan was to produce three kinds of battery-grade graphite with only the purest suitable for electric vehicles, but now Westwater is asking its consultants to run the numbers on producing more EV-bound graphite. The company had planned to produce a total 7,500 tons of graphite per year, eventually scaling up to 15,000.
"We believe ensuring the DFS (definitive feasibility study) will accurately reflect increasing market demand is a critical element to the design of the processing facility, and integrating this new information takes time. As a result, Westwater now expects the DFS to be completed in the fourth quarter of 2021," Jones said in a statement. "This additional market interest indicates positive potential for Westwater’s graphite business."
In June, Westwater announced it would be building a $124 million graphite processing plant in Kellyton, 30 miles from the mining company's Coosa Graphite Project in western Coosa County.
The Colorado-based company is in the running to become the first American graphite source, a strategic mineral — according to the U.S. government — for its use in the lithium-ion batteries found in electric vehicles. At present, China controls all battery-grade graphite production, while demand for the mineral is expected to increase 25 times over by 2040, according to the International Energy Agency, as the world shifts away from gas-powered engines.
Westwater's announcement Tuesday did not say how the delay will affect the rest of its Coosa Project timeline. Earlier this year, Westwater said it would break ground on the Kellyton plant by 2022, begin processing imported graphite by 2023 and mine its own Coosa County graphite by the end of the decade.
The company also has yet to announce any sales contracts, the ultimate feasibility test. In its press release, Westwater said it has met with more than 40 potential customers, resulting in 15 non-disclosure agreements with various automotive and battery manufacturers and developers. Ten graphite samples have been sent to potential customers for testing, a process that can take months.