Published: January 10, 2024 |

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South Star Battery Metals has received a $3.2 million grant from the Department of Defense (DoD) under the Defense Production Act (DPA) Title III authorities to advance a feasibility study (FS) for its BamaStar Graphite Project, South Star’s flagship graphite project in Alabama.

The FS will also incorporate a vertically integrated lithium-ion (Li-ion) battery-graphite anode manufacturing facility in the southeast corridor of the United States. The FS will cover all aspects of the planned BamaStar graphite mine from upstream mining operations to the downstream manufacturing of finished commercial battery-ready graphite products, while detailing all important and essential related information, including operational, financial, commercial graphite product performance data, and environmental, social, and governance criteria.

South Star’s planned battery-graphite products will include a broad range of products from coated spherical purified graphite (CSPG) active anode materials for Li-ion battery applications to conductivity-enhancement products for use in all major primary (i.e., non-rechargeable) and secondary (i.e., rechargeable) battery chemistries.

South Star is deeply committed to rapidly accelerating BamaStar’s downstream commercial battery-graphite manufacturing facility in the southeast corridor of the U.S. Given the extraordinary global demand for Li-ion battery-graphite anode materials and due to the complete lack of U.S. manufacturing capacity, the company’s management believes in the criticality of addressing the United States’ urgent need to have integrated, safe-sourced, domestic graphite production capability at commercial scale in the most efficient, cost-effective, and shortest timeframe possible. The company views the present challenging macroeconomic and geopolitical environments as a significant and increasing risk to the U.S. and its allies, in terms of both national and energy security.

“South Star is strategically bringing the first new graphite production in the Americas online in January 2024 at Santa Cruz. Provenance of material and security of supply of graphite and other critical metals is increasingly important in the current global macro and geopolitical environment. South Star is uniquely positioned to quickly bring commercial production to the markets with a diversified portfolio of near-term, integrated graphite production,” said South Star President and Chief Executive Officer, Richard Pearce.

“South Star has scalable assets in tier 1, stable mining jurisdictions and an experienced management team of builders and operators to deliver on commercial production. Our goals are to be safely and responsibly producing 100,000 tonnes/year of graphite concentrates and 70,000 tonnes/year of value-add material in phases over the next 5-7 years,” added Pearce.

“We have projects with great existing logistics and infrastructure that will allow us to have relatively modest capital intensity while ranking in the first quartile of operational costs so that we can be competitive throughout the inevitable economic highs and lows of commodity cycles,” concluded Pearce.

South Star’s Santa Cruz Graphite Mine in Brazil is currently finalizing phase 1 construction and will commence commercial concentrate production in January of 2024.

While the BamaStar graphite mine is being developed, South Star intends to initially commence commercial operations at the company’s planned U.S. downstream battery-graphite manufacturing facility utilizing premium graphite concentrate supplied from Santa Cruz. In addition to the assurance of security of supply of graphite concentrate to feed the U.S. downstream plant, the strategic and enduring competitive advantages of this integrated approach mitigates the risks of probable long-term supply/demand imbalance and probable price increases globally for graphite concentrate beginning in the near future. This integrated approach of a diversified portfolio of scalable facilities allows for an accelerated U.S. downstream production of critical battery grade anode materials, while BamaStar is developed and built in parallel. South Star intends for the company’s U.S. downstream facilities to scale over time and be ready to process the entirety of the BamaStar graphite mine’s concentrate feedstock.

The DoD will contribute funding to the BamaStar FS on a cost-share basis. As part of the agreement, the DoD will provide $3,179,999 and South Star will contribute $3,772,499 in matching funding on a cost-share basis over a period of 18 months, and after the successful delivery by the company of a preliminary economic assessment, which is scheduled for completion at the end of Q1 2024.

South Star Battery Metals is a Canadian battery metals project developer focused on the selective acquisition and development of near-term production projects in the Americas. South Star’s Santa Cruz Graphite Project, located in Southern Bahia, Brazil is the first of a series of industrial and battery metals projects that will be put into production. Brazil is the second-largest graphite-producing region in the world with more than 80 years of continuous mining. South Star’s next project in the pipeline is a development project in Alabama located in the middle of a developing electric vehicle, aerospace and defence hub in the southeastern United States. The project is a historic mine active during World Wars I & II.  Trenching, sampling, analysis, and preliminary metallurgic testing has been completed.

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