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StratMin signs offtake deal for Madagascar graphite

21st October 2014

By: Creamer Media Reporter

  

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JOHANNESBURG (miningweekly.com) – Aim-listed graphite producer StratMin Global Resources has started selling natural flake graphite from its Madagascar-based operations to an undisclosed independent graphite processor and merchant.

This followed on the signing of an offtake agreement between the parties, which was effective October 20.

The merchant has agreed to buy all the material within a predetermined product specification from StratMin and had also secured the first option to buy all other material produced by StratMin at its discretion.

“Securing this initial five-year offtake agreement demonstrates confidence in the quality and potential of StratMin's product and operations from an established graphite processing and trading company.

“The existing relationship has been highly cooperative already so I am looking forward to working closely with one the most respected graphite companies in the market to the benefit of StratMin,” commented MD Manoli Yannaghas.

In terms of the agreement, StratMin and the buyer would, in advance and on a rolling basis, determine pricing for the six months ahead. This mechanism was expected to enable both parties to reset prices to reflect any changes in the open market.

The parties would have four months from the pricing reset date to agree the pricing for the succeeding six months and either party could terminate the agreement within six months following the pricing reset date.

The offtake deal had set out the first 12 months' volumes, grades and fraction characteristics, which would be subject to a yearly review thereafter.

Meanwhile, the merchant had also agreed to provide StratMin with technical assistance through sharing graphite marketing information, as well as its own processing knowledge.

“Over time, the board expects this partnership to improve StratMin's ability to produce and market a world-class graphite product, which should command a premium price,” StratMin stated.

Edited by Chanel de Bruyn
Creamer Media Senior Deputy Editor Online

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