BlackEarth has signed a non-binding agreement with India-based Metachem that states construction of the 2,000 t/yr plant will commence ahead of a joint venture (JV) deal to be concluded within 90 days.

Production sites have been identified within an Indian Special Economic Zone (SEZ), areas in the country that offer incentives to resident businesses. The new processing facility, which targets a ramp up to 4,000 t/yr would aim to meet demand from European-based groups.

"This is a ground breaking agreement between two companies committed to the growth and development of this important high value commodity to fuel the world wide demand for downstream graphite products," said BlackEarth managing director, Tom Revy.

The company said demand for expandable graphite is growing with current and future pricing projections in the range of US$2,800 - US$3,500.

"This planned production site complements our other interests in the US and Europe, and further positions BlackEarth as a leading provider of graphite concentrate and a range of down stream graphite products over the forthcoming decades."

BlackEarth will source graphite concentrate for treatment for the new expandable graphite plant with their sales and marketing partner LuxCarbon.

CAPEX for the expandable graphite project is estimated to be US$3.5m in total. BlackEarth estimates gross JV revenue of US$6.25m initially, growing to over US$13m upon production ramp up to 4,000 t/yr.