Talga is currently the 100% owner of the Vittangi graphite project and proprietary technology for anode battery production, but the letter states that after a feasibility study to be completed by March 2021, the parties will further negotiate ownership and investments.

The project forms part of Talga's plans to establish a European supply of emission anode materials for lithium-ion batteries. The firm's development plan includes the construction of a scalable production facility with an initial production capacity of 19,000 t/yr coated anode.

Located approximately 20km east of LKAB's iron ore mine and railhead at Svappavaara, the Vittangi graphite project has a total JORC resource of 16.9Mt at 25.6% graphite, according to Talga's website. The company claims this is the highest resource grade of any JORC/NI 43-101 graphite deposit in the world.

LKAB said the investment was part of its strategy to reduce the company's reliance on iron ore.

"Growth within the industrial minerals market is a strategic activity to reduce dependence on the iron ore market which today accounts for around 90% of the external sales", said the company in a statement.

"Talga, with its proximity to LKAB's existing mining operations in Northern Sweden, may offer synergies with resources, skills and infrastructure. There are also potential commercial synergies with sales and distribution, including the developments in the ReeMAP project that will produce both phosphorus and rare earth elements through recycling mine waste".

LKAB plans to build a 50-hectare industrial centre that will use fossil-free processes to recycle tailings from LKAB's iron ore production into phosphorus products and rare earth elements. The planned LKAB site will host the company's "ReeMAP" tailings recycling project, with a pre-study scheduled for completion in 2021 and full production to start in 2027.