Executives from Australia-based graphite developer BlackEarth Minerals and India-based graphite producer Metachem Manufacturing Co have made positive progress toward signing legally binding agreements for a joint venture (JV).

The companies signed a Memorandum of Understanding (MoU) in June on the planned construction of a plant in India that will produce expandable graphite, which is a modified form of the mineral that has applications in metallurgy as an oxidation protection and insulator, and can also be used as a fire retardant.

BlackEarth said that since then, significant work has been and continues to be undertaken with Metachem in order to finalise and sign binding JV agreements in the short term. This includes the preparation of a Stage 1 plant development plan. Several potential development sites have been selected with a final decision on the preferred site imminent. The potential development sites are located within Special Economic Zones (SEZs) in India, which can offer significant tax, power and other economic concessions to developers.

In June, BlackEarth secured a binding commitment from Austria-based global graphite downstream processing company Grafitbergbau Kaisersberg to buy up to 2,500t/y of the proposed JV's production of expandable graphite.

BlackEarth predicts that demand for the proposed JV's expandable graphite product to rapidly expand to meet projected world-wide supply shortages.

Tom Revy, managing director of BlackEarth, said: "We have undertaken an enormous amount of work with our colleagues at Metachem in progressing this exciting development for the company. Apart from progressing toward agreement on the terms of binding JV agreements, we have been active in developing a plan for production, assessing proposed sites that offer economically attractive solutions and also assessing proposed supply arrangements with our marketing and supply partners in Europe.

"This is potentially a very significant development in the growth of our company, and we've undertaken a lot of work toward concluding binding JV agreements that suit our strategic short and long term business goals. We believe the terms that should be concluded offer a very attractive outcome and we look forward to updating the market with the full details of this in the short term."