EcoGraf Doubles German Offtake Volumes to 40,000 Tonnes Per Annum
EcoGraf has secured a binding term sheet with a major German graphite trader to double its Epanko graphite offtake to 40,000 tpa after five years, underpinning future expansions and project financing.
- Binding term sheet with major German graphite trader
- Initial 20,000 tpa doubling to 40,000 tpa after five years
- 10-year agreement with pricing floor for downside protection
- Combined 40,000 tpa contracted sales into Europe with ThyssenKrupp
- Supports Epanko expansions beyond 73,000 tpa capacity
Significant Volume Increase Secures European Demand
EcoGraf Limited (ASX:EGR) has landed a major boost for its Epanko Graphite Project in Tanzania by signing a binding term sheet with a leading German graphite trader to initially purchase 20,000 tonnes per annum (tpa) of natural flake graphite, doubling to 40,000 tpa after the first five years. This volume step-up effectively locks in about 55% of Epanko's initial 73,000 tpa production capacity, signalling strong European appetite for the Tanzanian graphite.
Contract Terms Offer Price Stability and Growth Support
The 10-year agreement sets pricing based on market reference prices but includes a floor price mechanism designed to shield EcoGraf from downside risks, ensuring the project's long-term commercial viability. The contract's Free on Board (FOB) terms from Dar es Salaam port, adjusted for flake size and carbon grade, align with industry standards, reflecting a pragmatic approach to market fluctuations. Importantly, the increased contracted volumes provide a solid foundation for EcoGraf’s planned staged expansions beyond the current production target.
Complementing Existing European Partnerships
This new arrangement complements EcoGraf’s existing binding agreement with ThyssenKrupp Metallurgical Products GmbH (now tk accelis Trading GmBH), which already accounts for 20,000 tpa of contracted sales into Europe. Together, these contracts secure 40,000 tpa of Epanko’s supply, reinforcing the project's integration into European supply chains. Notably, EcoGraf retains uncommitted capacity to support its vertically integrated HFfree battery anode material strategy, highlighting a balanced approach between contracted sales and strategic flexibility.
Confidentiality and Project Financing Implications
While the identity of the German graphite trader remains confidential due to contractual obligations, EcoGraf affirms the counterparty’s established reputation and creditworthiness. The term sheet is a preliminary agreement under German law, with definitive contracts subject to customary conditions and project financing milestones. This offtake deal is a critical piece in EcoGraf’s financing puzzle, underpinning confidence in the project's viability and supporting ongoing efforts to secure funding for Epanko’s development and future expansions.
Positioning for European Graphite Demand Growth
The agreement aligns with rising European demand for secure, diversified graphite supply chains amid geopolitical and ESG pressures. EcoGraf’s strategic moves, including recent board appointments to strengthen European ties, reflect a concerted effort to capitalise on this trend. With over US$30 million invested to date in its vertically integrated battery anode materials business, EcoGraf is positioning Epanko as a key supplier to the lithium-ion battery and advanced manufacturing markets across Asia, Europe, and North America.
Bottom Line?
EcoGraf’s expanded German offtake agreement not only secures substantial European demand but also lays groundwork for Epanko’s future growth, making project financing and execution the next critical hurdles.
Questions in the middle?
- Will EcoGraf successfully convert the preliminary term sheet into definitive contracts amid project financing conditions?
- How will evolving European graphite demand and pricing dynamics influence Epanko’s expansion plans?
- What role will EcoGraf’s HFfree battery anode strategy play in balancing contracted sales and uncommitted capacity?
