Peninsula Mines’ wholly-owned subsidiary Korea Graphite has amended and extended its flake graphite supply agreement with DNI Metals.

Under the terms of the agreement, Korea Graphite will receive up to 24,000t per year of flake graphite from DNI from the latter’s projects in Madagascar for sale to Korean end users.

The supply agreement is conditional upon Korea Graphite finalising offtake agreements with the end users by 1 July next year.

Peninsula Mines managing director Jon Dugdale said: “This amended flake-graphite supply agreement with DNI will assist the company to secure offtake agreements with Korean flake-graphite end-users and will compliment the company’s flake-graphite resource delineation and development plans in Korea.

“Peninsula has established strong relationships with Korean end-users that are looking to secure flake-graphite supply for lithium-ion battery anode production as well as for cutting-edge new technologies such as expandable graphite, a non-flammable building cladding and insulation product.”

The supply agreement comprises the terms of the supply to Korea Graphite.

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DNI is required to supply minimum 500t of flake graphite production per month from 1 July for at least four months.

Thereafter, the company will supply 1,000t of graphite production per month from 1 January 2020 for a term of six months.

Supply will then be raised to 2,000t of graphite production a month from 1 July 2020 for a minimum period of 24 months.

“Peninsula has established strong relationships with Korean end-users that are looking to secure flake-graphite supply.”

Peninsula and DNI are engaged in negotiations to explore cooperation on accelerating the development of DNI’s large-flake graphite projects in Madagascar.

DNI owns two saprolite-hosted graphite deposits, Vohitsara and Marofody, located 50kms from the country’s main seaport of Toamasina.

The company is keen on developing the Vohitsara project, subject to the economic viability and technical feasibility.