Volt Resources has extended and significantly increased its graphite offtake agreement with Qingdao Baixing, aligning with the Bunyu project’s development timeline and production targets.
- Offtake agreement with Qingdao Baixing extended and volumes increased
- Annual coarse flake graphite sales raised to 20,000tpa for Years 1-2
- Volumes jump to 90,000tpa for Years 3-5, contingent on Stage 2 development
- Agreement supports Bunyu’s Stage 1 production target of 40,000tpa
- Qingdao Baixing is a major Chinese graphite manufacturer and exporter
Offtake Agreement Extension Aligns with Project Development
Volt Resources Limited (ASX – VRC) has announced a significant update to its Bunyu Graphite Project in Tanzania, extending and increasing the annual sales volumes under its binding offtake agreement with Qingdao Baixing Graphite Co., Ltd. The revised agreement now sets initial annual coarse flake graphite offtake volumes at 20,000 tonnes per annum (tpa) for the first two years, rising sharply to 90,000 tpa for years three to five, subject to the successful development and commissioning of the project’s Stage 2 expansion.
This extension and volume increase align closely with the development timeline under the recently executed Unbounded Opportunities Fund SPC (UOF) binding term sheet, which provides a funding and development framework for the Bunyu project. The move reflects growing confidence in the project’s prospects and supports Volt’s increased Stage 1 production target of 40,000 tpa.
Strategic Partnership with Established Graphite Producer
Qingdao Baixing, a well-established Chinese graphite manufacturer and exporter with an annual output exceeding 50,000 tonnes, is the counterparty to the offtake agreement. The company’s president, Feng Yu Peng, expressed satisfaction with the increased purchase volumes, citing rising graphite consumption and the Bunyu project’s role in meeting their supply needs.
Volt’s Executive Chairman, Asimwe Kabunga, highlighted the importance of this variation as a strong endorsement of the Bunyu project’s potential and the ongoing partnership with Qingdao Baixing. The agreement’s structure includes a five-year term with an option to extend for an additional five years by mutual consent, providing a stable sales foundation as the project scales up.
Product Mix and Market Positioning
The Bunyu project’s product mix is weighted towards coarse flake graphite, which commands higher prices than finer grades. Approximately 54% of the planned product mix consists of coarse graphite, forecast to generate more than 65% of Stage 1 annual sales revenue. This focus on higher-value graphite products positions Volt well within the competitive graphite market.
Pricing under the offtake agreement will be set prior to each contract half-year, based on prevailing market prices adjusted for mesh size and total graphitic carbon content. Delivery terms specify shipment from the Port of Dar es Salaam in Tanzania, ensuring logistical alignment with Volt’s operational plans.
Looking Ahead – Development and Market Dynamics
The increased offtake volumes and extended agreement term come as Volt advances the development of the Bunyu Graphite Mine and Processing Plant. The company’s partnership with the Dubai-based Unbounded Opportunities Fund is central to funding the Stage 1 development, targeting capital costs of US$37 million and competitive operating costs.
While the volumes for years three to five depend on the successful execution of Stage 2, this agreement provides a clear pathway for scaling production and securing market demand. It also underscores the strategic importance of Bunyu within Volt’s broader portfolio, which includes graphite refining operations in the United States and other mineral interests in Europe and West Africa.
Bottom Line?
Volt’s expanded offtake deal signals growing market confidence but hinges on successful Stage 2 execution.
Questions in the middle?
- What are the key milestones and risks for the Stage 2 development at Bunyu?
- How will graphite pricing volatility impact the profitability of the offtake agreement?
- What role will the Unbounded Opportunities Fund play in accelerating project timelines?