Canadian graphite specialist Ceylon teams up with LOLC

• Signs non-binding MoU to develop new graphite mines outside of existing Vancouver-based Ceylon Graphite portfolio
• Plans to construct and operate state-of-the-art graphite processing facility in SL 
• Says JV with LOLC as strategic partner will develop and operate additional new graphite mines and facility to meet global battery anode needs

Ceylon Graphite Corp. (Ceylon) has announced the execution of a Memorandum of Understanding (MoU) with two subsidiaries of Lanka ORIX Leasing Company Group (LOLC) to explore new opportunities and products. 

Pursuant to the MoU, Ceylon, through its subsidiary Plumbago Refining Corp B.V. (Plumbago), and LOLC, through its subsidiaries LOLC GEO Technologies Ltd. (LOLCGT) and LOLC Advanced Technologies Ltd. (LOLCAT), will work together to develop new graphite mines outside of the existing Ceylon portfolio, and to construct and operate a state-of-the-art graphite processing facility in Sri Lanka.

Ceylon is a public company listed on the TSX Venture Exchange that is in the business of mining for graphite, and developing and commercialising innovative graphene and graphite applications and products. 

Graphite mined in Sri Lanka is known to be some of the purest in the world and has been confirmed to be suitable to be easily upgradable for a range of applications including the high-growth electric vehicle and battery storage markets as well as construction, healthcare and paints and coatings sectors. 

The Government has granted the company’s wholly-owned subsidiary Sarcon Development Ltd. an IML Category A licence for its K1 mine and exploration rights in a land package of over 120 km. These exploration grids (each 1 sq. km. in area) cover areas of historic graphite production from the early 20th century and represent a majority of the known graphite occurrences in Sri Lanka.

The MoU provides for Ceylon and LOLC to develop and operate a minimum of three mines on grids located near the Government-owned Kahatagha Mine, an area known to be rich in high-grade vein graphite, as high grade as 98% Cg. 

Under the MoU, Ceylon intends to purchase a 10% interest in LOLCGT with an option to buy up to 40% of the company. The development of the new mines will be funded on a pro-rata basis, will be operated by Ceylon, and Ceylon will agree to offtake all mine production for further processing.

Further, Ceylon and LOLC will construct an in-country value-add facility to upgrade the mine product further to 99.99% purity, ready for spheronisation. This mine production will be in addition to Ceylon’s existing and planned mining operations at K1, M1, H1, P1 as well as six other potential sites under development.

Under the terms of the MoU, LOLC intends to purchase up to an aggregate of 15% of Ceylon shares either as a lead order on future financing or under separate terms with timing and terms to be detailed in a definitive agreement.

Both parties will also agree to cross-appointments of designates to their respective corporate boards.

“We are excited to embark on this joint venture together with LOLC Group, the most profitable company in Sri Lanka, led by Ishara Nanayakkara, one of the most respected business leaders in Asia, whose extraordinary vision aligns with Ceylon’s goals in graphite and graphene applications,” stated Ceylon Graphite CEO Don Baxter. 

“We’re delighted LOLC is eager to support the joint venture’s technical strategy to produce a minimum of 50,000 to 100,000 tonnes per year of unparalleled quality spheronised graphite for the rapidly growing anode applications market as well as to collaborate with us and share successes in the graphene production technology.”

“LOLC is pleased to partner with a well-established graphite production company like Ceylon,” said LOLCAT CEO Danesh Abeyrathne. “Together we can work to capture a greater share of the world’s battery anode and graphene applications markets than we can working separately. This will benefit both our companies as well as the people of Sri Lanka in a significant way.”

The MoU is non-binding and signals the intent of both parties to negotiate in good faith a definitive agreement to reflect the intent and content of the MoU. There is no assurance that such an agreement will be reached.

LOLC is the largest corporate conglomerate in Sri Lanka. It recorded the highest profitability in Sri Lankan corporate history in FY 20/21, with Rs. 57 billion ($ 285 million) Profit Before Tax. LOLC’s portfolio includes leisure, plantations, agri-inputs, renewable energy, construction, manufacturing and trading and other strategic investments, with micro-finance enterprises expanding out to Cambodia, Myanmar, Pakistan, Indonesia, Philippines, Zambia and Nigeria. 

LOLCGT is the mining arm of LOLC and holds several exploration licences from the Government Survey and Mining Bureau (GSMB). LOLCAT is the research arm for LOLC Group, and a joint owner of Sri Lanka’s first graphene and advanced material company, currently producing graphene from ultra-pure highly crystalline Sri Lankan graphite, and making significant advances in a variety of breakthrough applications involving graphene.