Industrial manufacturing company Valence Industries Limited (ASX : VXL) has announced that it has signed multiple Memoranda of Understanding (MOUs) with four customers to supply more than 80,000 tonnes of graphite over 2 years from its Uley Mine near Port Lincoln.
According to the ASX announcement, Phase 1 of the Uley mine will only be producing 14,000tpa of graphite, while Phase 2 will increase production to between 50,000 to 60,000tpa of graphite.
Phase 1 is due to commence in the near future, while Phase 2 requires the construction of a new plant.
The company revealed that it is satisfied with the obtained price levels under the MOUs, with which it has achieved diversification across regions and industries through to differing types of customers.
Each MOU is for multiple products from the company’s flake graphite product range and is for the supply of flake graphite production to customers in different regions of the world from Europe to the Asia Pacific.
With the MOUs, the company will achieve a spread of sales and market penetration.
“This is consistent with the market engagement and market segmentation strategies pursued by the Company over the last 12 months. The MOUs deliver important customer, industry and product diversification,” it says in the announcement.
Valence Industries owns and operates the only graphite mining and manufacturing facilities in Australia located at Uley in South Australia.
The company achieved first sales of graphite by an Australian company in over 20 years.
Valence Industries also operates as an industrial manufacturer of high-grade flake graphite products for distribution and sale to global markets.
Just last week, the company announced that it has more than doubled the amount of stockpiled materials at its Uley graphite mine site from 74,000 tonnes to 174,000 tonnes.