RE: The Great Graphite Shakeup is Coming SM: The only new mine that survived, strangely enough, is TIMCAL in Quebec, Canada, which is one of the biggest outside of China. It produces 20 thousand tons (Kt) per year. It really only survived because Imerys, a major French minerals company, bought it because it is a big buyer of graphite. The company then was known as Stratmin. Otherwise, the rest of producers stopped abruptly. Examples include the Uley mine in Australia, which Mega Graphite Inc. (MEGA) is currently developing, Ontario Graphite Ltd.'s (private) Kearney mine and Flinders Resources' Kringel mine, formerly known as Woxna.
TCMR: Speaking of Australia, do you want to give us an update on Strategic Energy Resources Ltd. (SER:ASX)?
SM: It's gone a bit quiet. It was making good progress at the start of this year, but I think there have been some changes at the corporate level of MEGA Graphite. The last six months have been very quiet for many resource companies, however. Most likely, it is probably a case of the commodity cycle taking a break.
TCMR: Do you see any catalysts coming up for MEGA/Strategic Energy Resources?
SM: Funding is key. The Uley mine has a stockpile of approximately 10 Kt of graphite that the company says is almost ready to go. It needs to be reprocessed however, and building a functioning processing plant is most of the battle. Luckily, getting tonnages to the market is easier for MEGA/Strategic than a lot of companies—the key is getting it accepted by end-users that have been using the same supplier for many years.
Consistency is key for Mega and for all new graphite suppliers. Graphite is a specialist product, not a commodity. Buyers want a consistent product with impurities they can manage. Knowing what to expect when you buy graphite is more important than producing the highest quality and purity.
Ultimately, with the global financial situation the way it is, funding is critical for all these companies. It's been difficult.