Alabama Graphite Refinery Scoping Study Shows US$136M NPV and 58% IRR

Strategic Move into US Graphite Refining

Volt Resources Limited (ASX, VRC) has taken a significant step forward with the completion of a scoping study for its planned Alabama Graphite Refinery. The study confirms strong project economics, positioning Volt to capitalize on growing demand for battery-grade graphite in the US and beyond. With a pre-tax net present value (NPV) of US$136 million and an internal rate of return (IRR) of 58%, the refinery promises to be a lucrative addition to Volt’s portfolio.

The refinery will produce both high purity (~99.5%) and ultra-high purity (~99.95%) graphite, essential materials for industrial applications including batteries, electronics, and lubricants. Notably, Volt’s patented purification process avoids the use of hydrofluoric acid (HF), a hazardous chemical commonly used in graphite refining, offering a safer and potentially more cost-effective alternative.

Capital Efficiency and Location Advantages

The initial capital expenditure is estimated at US$21 million for the first stage, with further staged investments planned to scale production from approximately 12,000 tonnes per annum in 2028 to nearly 48,000 tonnes by 2035. The refinery’s location in Tuscaloosa County’s Airport Industrial Park provides ready access to critical infrastructure such as energy, water, transport, and telecommunications, alongside attractive state and local government incentives designed to support industrial development and job creation.

This strategic positioning near potential customers and transportation hubs enhances the project’s commercial viability and supply chain efficiency. Volt’s approach to sourcing flake graphite concentrate from third-party suppliers worldwide further underscores its flexible and scalable business model.

Government Support and Funding Pathways

Volt is actively engaging with US government agencies, including the Department of Energy, Department of Defense, and the Export Import Bank, to explore funding opportunities aligned with national priorities for critical minerals supply chains. Recent executive orders and national emergency declarations underscore the strategic importance of domestic production of battery materials, creating a favorable policy environment for Volt’s refinery.

In addition to government funding, Volt is exploring pre-payment arrangements with potential customers and conventional debt financing options. The company anticipates the refinery will become cash flow positive by its fourth year of operation, supporting sustainable growth and operational funding.

Technological Edge and Competitive Landscape

Volt’s non-HF purification process represents a technical breakthrough, reducing environmental and safety risks associated with traditional methods such as thermal purification and hydrofluoric acid treatment. This innovation could provide Volt with a competitive advantage in the US graphite market, which currently relies heavily on imports.

The scoping study’s sensitivity analysis highlights the project’s resilience to variations in capital and operating costs, though feedstock graphite prices remain a critical factor for financial viability. Volt’s ongoing pilot plant trials and process optimizations will be key to refining cost assumptions and scaling production.

Next Steps Towards Final Investment Decision

With the scoping study completed, Volt is focused on advancing pilot plant operations, securing offtake agreements, and finalizing funding arrangements. Subject to these developments and regulatory approvals, the company aims to make a final investment decision in the near term. This project not only aligns with Volt’s broader strategy to expand its downstream graphite business but also taps into the growing demand for secure, local supply of critical battery materials in the US.