State agency will work to keep graphite refinery in Alaska
The state infrastructure bank is partnering with a junior graphite mining company in an effort to keep Alaska’s natural resources in state a little longer.
A memorandum of understanding, or MOU, signed Feb. 7 by leaders of the Alaska Industrial Development and Export Authority and Graphite One Resources Inc. aims to find a suitable site for a value-added graphite processing facility in conjunction with the mine the company is working to develop.
Vancouver-based Graphite One has been evaluating a large graphite prospect north of Nome on the Seward Peninsula for several years. The company has mostly wrapped up its resource evaluation work and is on to evaluating the economics of the overall Graphite Creek mine and processing project.
Graphite One released a preliminary economic assessment of its plans Jan. 25. The study estimates the $363 million graphite mining and refining project could be worth more than $1 billion to investors and have a payback period as short as four years after full production.
The Graphite Creek assessment outlines a project with a $233 million mine and mill. The unprocessed graphite would then be barged from Nome to a $130 million facility where it would be refined into a marketable 99.95 percent graphite concentrate.
The company is currently forecasting construction and mine startup for 2020-2021.
The study assumes the processing facility would be located in Washington for its low-cost power and access to markets, but company representatives have said they would be open to keeping the whole operation in Alaska.
AIDEA and Graphite One are each responsible for their own costs under the MOU. It allows AIDEA to work with the company and other state agencies to identify potential sites for a graphite refinery. It also enables the state-owned authority to evaluate the need for support infrastructure and options it could have to finance portions of the Graphite Creek project.
“We’re in competition with the Lower 48 on this, so our objective is to do everything we can to help establish this value-added industry in our state,” AIDEA spokesman Karsten Rodvik wrote in an email.
AIDEA also sent Graphite One a list of potential sites and contacts — locations in Ketchikan, Unalaska and numerous Southcentral options — that at a high level could be suitable for the refining plant.
“This MOU with AIDEA marks an important step in progressing our studies on the development of our Graphite One project,” Graphite Creek CEO Anthony Huston said in a release. “It serves as a signal of Alaska’s commitment to responsible development of the state’s natural resources. Graphite One pledges to be a responsible partner in this potential development.”
Specifically, the prospect runs for 11 miles along the north flank of the Kigluaik Mountains and holds nearly 6 million tons of indicated and inferred resources at a 7 percent resource grade cutoff; enough to keep a mine operation processing 1 million metric tons per year of ore going for at least 40 years, according to the company.
Considered a high-grade, large flake graphite deposit, the Graphite Creek prospect would be the country’s sole operating graphite mine if it is ultimately developed.
Flake graphite is a primary component in lithium ion batteries used in electric cars and a growing number of smaller electronic devices.
Graphite One representatives have described the prospective mine as similar to a large gravel pit; graphite mining does not require the chemicals and metallurgical processes often found in hard rock metal mining.
Elwood Brehmer can be reached at [email protected].