# Tirupati Graphite results success buoyed by long-term materials demand for clean energy revolution

- Link: https://www.directorstalkinterviews.com/tirupati-graphite-results-success-buoyed-by-long-term-materials-demand-for-clean-energy-revolution/4121023847
- Published: 2021-09-21T16:14:55+01:00
- Author: Giles

**[Tirupati Graphite plc](https://www.directorstalkinterviews.com/company/tirupati-graphite-plc/tgr.l)**(
[LON:TGR](https://www.directorstalkinterviews.com/company/tirupati-graphite-plc/tgr.l)),
the fully integrated, revenue generating, specialist graphite producer and graphene
and advanced materials developer, has provided Final Results for the year ended 
31 March 2021.  A copy of the Report and Accounts will be available shortly on the
Company’s website, [www.tirupatigraphite.co.uk](http://www.tirupatigraphite.co.uk/).

**HIGHLIGHTS – DURING & POST PERIOD END**

**Madagascar operations further strengthen value building from primary flake graphite
projects**

· Sahamamy 3,000 tpa plant achieves 57% operating margins, up from 48% in the previous
year.

· Vatomina 9,000 tpa plant commissioned in September 2021, production now ramping
up to full capacity.

· Construction activities for second 18,000 tpa module at Sahamamy underway which
will uplift production capacity to 30,000 tpa by Q1/Q2 2022, 10x from the previous
year that is set to grow to 84,000 tpa by 2024.

· Buyers for the Company’s high-quality flake graphite from Madagascar including
large corporates from the US, EU and Asia are lined up with market development activities
ongoing in advance of Company’s expanding production.

· Company’s transition to renewable energy to substantially meet its energy needs
commenced with development of its first hydro power project at Sahamamy, affirming
its commitment to green energy and [sustainability](https://www.directorstalkinterviews.com/sustainability-green-stocks-news).

· Company well positioned to benefit from post pandemic recovery and capture economies
of scale as it increases production capacities from its Madagascan projects.

**Financial Highlights**

· Revenues of £1,123,426 and Operating Profits of £635,342, representing 57% operating
margins.

· Negative EBITDA marginally higher at £(896,239) compared to £(684,872) in 2020,
despite extensive corporate and business development and accelerated project development
activities post admission.

· Successfully raised gross proceeds of £6 million at 45p per share at IPO in December
2020 and a further £10 million at 90p per share in April 2021. The Company is now
fully funded through to end of 2022 for its stage 1 developments across its portfolio
of business units (see RNS dated 16 April 2021).

· Emphasis remains on controlling CAPEX and OPEX to maintain its demonstrated low-
cost advantage, generating early revenues to minimise pre-production investments
and maximising margins from operations.

**Speciality graphite and graphene & technology divisions under TSG continue to 
evolve**

· 1,200 tpa plant at the Patalganga project continued to develop and deliver niche
expandable graphite products for a variety of applications, continuing to create
new markets and buyers ahead of the large scale speciality graphite project coming
into production in 2H 2022.

· Spheroidization technology evolved in collaboration with a German equipment manufacturer
with yields of up to 68% as compared to average c.35% using existing Chinese manufacturing
technologies.

· Company’s non-energy intensive, zero hydro-fluoric acid purification technology
for its high-purity graphite continues to receive significant interest from buyers
for its green and sustainability advantages.

· First stage development at Tirupati Graphene and Mintech Research Centre (“TGMRC”)
the Company’s state-of-the-art R&D and technology centre commissioned enabling graphene
manufacturing, advanced materials developments and mineral processing technology
consultancy activities to advance and come into first revenues.

· TGMRC developed ground-breaking graphene-aluminium composite (“Al-Gr Composite”)
and is working with a suite of companies including a [FTSE 100](https://www.directorstalkinterviews.com/news/ftse-100)
company engaged in the manufacturing of conductors for advanced applications including
aerospace, green mobility, sub-sea transmission etc.

**Highly favourable current and long-term demand profile across business units**

· UBS suggests a 700% growth in demand for flake graphite to 5.9 million tonnes 
per year by 2030.

· Graphite designated as a critical raw material by US and EU, making it a key contributor
to the green energy transition and electrification of mobility.

· Diverse applications for graphite including thermal management in electronics,
fire safety, metal manufacturing and forming, fuel cells, polymers, composites and
in other advanced materials.

· Graphene is leading the development of 2D and advanced materials and set to fuel
the upcoming Advanced Materials Revolution.

**Continued corporate evolution focussed on the Environment, Sustainability and 
Governance**

· Admitted to the official list of quoted companies on the main market of the LSE
and accredited with the Green Economy Mark for companies who contribute to climate
change mitigation and adaptation, waste and pollution reduction, and the circular
economy.

· Active member and regular contributor of the Quoted Companies Alliance; Critical
Materials Association; and The Graphene Council.

· The Company has voluntarily adopted the QCA Code for Corporate Governance as far
it is practicable given its size and stage and Corporate Governance Report is included
in the Annual Report.

· The Company has also voluntarily adopted the GRI standards for ESG reporting and
will be releasing its maiden Sustainability Report adhering to the GRI standards
in the coming weeks.

· Kept shareholders and markets informed of significant developments of the Company
through regular RNS’s, road shows, investor meetings, conferences and other investor
networking platforms

**Raised profile as a sustainable, high-quality, technologically advanced ex-China
source for flake graphite to global customers**

· Reach registration accorded for Company’s suite of expandable graphite products
in the EU

· Marketing MOU signed with Hanwa Co. LTD., a leading Japan-based global trading
and investment company and one of the larger traders of battery chemicals and steel
products in the Asian region

· Status as a sustainable supplier of flake graphite continues to develop as buyers
start to recognise the Company’s proprietary environmentally friendly processes 
compared to peers, provided critical advantage and access to new markets for its
suite of primary and specialty graphite products

**Focused on enhancing the Company’s global resource base and diversifying supply
of high-quality graphite**

· Commenced Stage II Exploration and Drilling Programme in Madagascar targeted at
upgrading current Mineral Resource Statement, anticipated to complete by end of 
2021.

· Signed agreement to acquire two advanced-stage, high-grade, complementary graphite
projects in Mozambique from ASX listed Battery Minerals Ltd, adding c.6x of JORC(
2012) Resources and c.12x of contained graphite.  

Key appointments made to strengthen and support rapid growth of the Company

· Appointed additional independent Non-Executive Director, Mr. Lincoln Moore.

· Appointed several eminent technocrats and scientists specialising in the fields
of flake graphite, speciality graphite, graphene and advanced materials and mineral
processing technology and over 30 engineers, geologists, and specially trained technicians
across all three business units.

**CHAIRMAN’S STATEMENT**

First, may I extend a very warm welcome to the hundreds of new shareholders in our
Company, and hundreds of stakeholders too, the Tirupati Graphite (“TG”) family has
grown from strength to strength in this eventful year. It is also my privilege to
present to you the first Annual Report as a quoted company and the fourth since 
inception. We find ourselves to be fortunate – being in the right space at the right
time – contributing to the global cause of mitigating the risks of climate change.

The year gone by was monumental, providing us the opportunity to extend our gratitude
to the Financial Conduct Authority (“FCA”) and The London Stock Exchange Group (“
LSE”), and all of our advisors who helped us complete the process for admission 
of our ordinary shares on the main board of the LSE. The successful capital raise
at our Initial Public Offering (“IPO”) paved the way and the oversubscribed follow-
on placing completed in April 2021 further strengthened our resolve and conviction
to fast-track the development of our three business divisions in Madagascar and 
India. We stand tall and the Company is proud to be the only fully integrated graphite
producer and developer publicly quoted in London.

During the year under review, I am pleased to report that considerable progress 
was made towards achieving our goal of becoming the pre-eminent supplier of sustainable
graphite, graphene and advanced materials. Our focus on graphite and graphene is
strategic, based not only on our team’s track record of working in the sector for
decades, but also on what we believe to be a highly favourable long-term demand 
profile of a critical material that is a substantial contributor to the global clean
energy revolution and therefore, an opportunity for us to become a contributor to
the evolution and advancement of new age materials for a greener globe. 

You do not have to look far to see just how ubiquitous and important graphite has
become to our everyday lives.  Not only is it central to the green energy transition
and electrification of mobility, but it is also increasingly used in the fire safety,
thermal management, composites and advanced materials industries amongst many others,
helping to reduce emissions, increase energy efficiency and reduce fire hazards.

According to a report by Battery Metals Review, most commentators are forecasting
electric vehicles (‘EV’) sales to be in the range between 30-40 million per year
by 2030, from the circa 2 million EVs sold in 2019 resulting in an 1100% increase
in current flake demand for batteries to c.3.1 million tonnes per year by 2030. 
And that is for usage in batteries alone.  Factoring other industries into the equation
and the figure is likely to be substantially higher with the likes of UBS suggesting
a 7x growth in demand to 5.9 million tonnes per year by 2030. 

Notably in our opinion, not all graphite projects currently in production produce
sustainable high-quality flake graphite. Much of the current volumes used in electric
vehicles reaching the market comes from mines in China which tend to use significant
amounts of hydrofluoric acid in their processing methods to produce high purity 
grades of graphite, a practice which we believe is counter to global sustainability
goals in the long term. 

As we have successfully demonstrated at our two Madagascan projects, Sahamamy and
Vatomina, the Company is able to produce large flake, high-quality graphite using
unique and importantly sustainable processing techniques which not only means that
our graphite is greener, but that we can deliver it at very high margins. With our
first 9,000 tpa module at Vatomina now commissioned at the upgraded capacity, and
having raised additional funds in April 2021, we are accelerating our development
plans and anticipate total capacity across both projects to reach 30,000 tpa by 
Q1/Q2 2022. This will represent a ten-fold increase since becoming a listed company
in December 2020. 

Concurrently, we have been pushing ahead with the redevelopment of the existing 
hydro power facilities in Madagascar which is targeted to meet most of the power
requirements for the current Sahamamy operations. We have also initiated the studies
on the use of renewable energy which is aimed at substantially powering our projects
in Madagascar when we reach the 30,000 tpa capacity build out under our medium-term
development plan (“MTDP”).

In addition to our significant achievements under our existing development plans,
the icing on the cake for us was entering into a conditional acquisition agreement
for the Montepuez and Balama Central projects from ASX listed Battery Minerals Ltd.
The acquisition requires approval from shareholders of Battery Minerals Ltd as well
as approval by the Ministry of Mineral Resources and Energy in Mozambique. The Montepuez
Project is a construction ready project with substantial reserves and resources,
while the Balama Central Project is an advanced feasibility stage project with a
combined JORC Code (2012) resources of c. 152 million tonnes @ 8.5% TGC. Post completion
of the acquisition, the projects will provide us with additional resources to expand
and diversify our supply of high-quality graphite as the markets evolve driven by
growing demand from EV and other segments. The other advantages of the acquisition
for us include diversification of our country risks; access to higher grade deposits;
and a complementary type of graphite (i.e. more of the smaller flake variety) which
is demanded by the EV sector. The acquisition demonstrates our team’s ability to
achieve our stated strategic objectives both operationally and corporately. The 
team are now working with the vendors side to complete the acquisition and have 
already began re-working the development plans for Montepuez using our in-house 
expertise and experience; it is our intention to advance into construction and first
production in the shortest available time to take advantage of the favourable tailwinds
of the graphite markets. We will continue to update the market on the progress of
the acquisition and developments as they advance.

Our Patalganga project continues to evolve at a good pace. We continue to create
new markets for our range of expandable graphite products and provide the backbone
for the creation of markets for our larger downstream specialty graphite project
which is under construction. The integrated, multi-product speciality graphite project
will provide throughput of all variants required for high-tech graphite applications,
thus making us one of the very few companies globally, which can boast the capabilities
of providing ‘any type of graphite’ required to our customers. We have continuously
differentiated and evolved our processing technologies for these niche products,
distinguishing our manufacturing processes from the conventional processes used 
by most of the current Chinese sources of specialty graphite, minimising our footprint
on the environment and ensuring our projects are sustainable.

In tandem with the growing expectations on sustainable supply chains and the opportunities
this presents, we see ourselves evolving as a frontrunner in the energy storage 
arena, alongside fire safety and thermal management and composites and advanced 
materials applications of speciality graphite products.

Lastly, but not least, our Graphene and Mintech Research Centre which is our state-
of-the-art R&D and technology centre designed to house our manufacturing facilities
of graphene and other advanced materials, has completed the first stage development;
this is a commendable achievement that truly sets us apart from any other company
in the UK and possibly the world. This division of the Company has been making huge
strides forward including the creation of manufacturing capabilities for Graphene
Oxide (“GO”) and Reduced Graphene Oxide (“rGO”) at a significant and commercially
viable kilogram per day scale; taken on a number of consultancy engagements for 
process development projects; and has made its first significant in-roads into the
new world of metals and 2D composite materials.

The successful development of our ground-breaking aluminium graphene composite (“
Al-Gr Composite”), which has the potential to replace copper in many weight-sensitive
applications, puts us into the category of other advanced materials technology companies
which is an achievement that every stakeholder should take pride in. It is also 
testimony to the leading efforts and capabilities of the Company in the world of
advanced materials.  Not surprisingly, we have been receiving a lot of interest 
for our Al-Gr Composite product and we are now working with a suite of companies
to develop it further and pave the way to commercialisation. 

To conclude, I again share our principles of value creation, which we have adopted
since inception of our Company, and which continue to remain our guiding principles:

● _Value creation for the planet and for future generations:_

By developing unique materials which have many ‘green’ applications contributing
towards a more sustainable and greener planet for future generations and developing
technologies and processes to minimise emission and waste generation.

● _Value creation for our employees:_

By providing opportunities for performance and learning, achieving corporate goals
and personal development, to inspire quality delivery on the objectives and values
we strive for.

● _Value creation for the local communities we operate in:_

By looking after our employees and their families and providing healthcare, education
and recreational facilities and support for local communities, helping bring communities
together and improving their general quality of life. 

● _Value creation for our shareholders:_

Through well considered and crafted business strategies and plans, implemented with
persistence and determination, and adopting a culture of cost prudence, hard work,
and delivering on targets.

You will observe that in our journey to date, we have performed on each of the four
pillars of value creation we set for ourselves at the outset:

1)  Providing materials for the green economy and developing novel new age materials;

2)  Nurturing human capital and developing a team that delivers;

3)  Improving the quality of life of thousands of people in the communities around
us; and

4)  Delivering on a prudent business plan and creating values for our shareholders
reflected in our share price growth.

We are proud of our long history of innovation, our reputation as a respected, well-
governed and safe place to work, and the role our products play in the green revolution.
At the heart of this success is our team spirit of ‘together we can and will achieve
our goals’.  As the Company continues to grow at a monumental pace, we look forward
to maintaining this ethos and upholding our sustainable values to deliver measurable
success on every level be it economic, social, or environmental.

Shishir Poddar

Executive Chairman & Managing Director

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