Northern Graphite keeps Quebec mine alive with federal support

Northern Graphite (TSXV: NGC) has been given a lifeline to extend operations at its flagship Lac des Îles (LDI) mine in Quebec after securing C$6.225 million in funding from the Canadian government.LDI, the only graphite producer in North America, has faced operational uncertainty due to a slowdown in the global electric vehicle market, leading to falling prices in battery minerals. Earlier this year, Northern Graphite said it will shut the mine down by the end of this year unless it secures C$10 million for an expansion.Located about 150 km northwest of Montreal, the mine has been in operation for 35 years, serving primarily industrial clients in the US, from refractories for steelmaking to heat management in electronics and friction materials for the global automotive sector. Last year, it supplied 12,000 tonnes of graphite concentrates.Northern Graphite has been looking to boost its annual output to the installed capacity of 25,000 tonnes, and is planning to extend the operation by eight years by opening a new pit this year. However, additional funds would be required for this expansion.The new investment, provided by Natural Resources Canada and delivered by The Economic Development Agency of Canada for Quebec Regions (CED), is expected to finance 75% of the eligible costs for the pit extension at LDI.Northern Graphite’s CEO Hugues Jacquemin said the funding would help keep the LDI mine in operation and allow the company to continue supply its industrial customers, as well as pursue its goal of becoming a key supplier to growing defence and battery markets in North America.“This investment in Northern Graphite’s operations in Lac-des-Îles will strengthen Canada’s domestic critical mineral supply chains, while positioning us as a global leader in the sector,” he stated.Northern Graphite’s shares rose to a new 52-week high of C$0.20 on the funding announcement, before pulling back to around C$0.18 by midday. The company’s market capitalization is C$21.6 million.Graphite demand highDespite market headwinds, industrial demand for graphite — particularly in the refractory sector — remained strong in 2024 and is expected to stay firm through 2025, especially in North America, which accounts for 85% of the company’s sales.Large and jumbo flake graphite, essential for industrial use, has grown scarcer as China scaled back mining amid a glut of anode material. Global supply is further constrained due to disruptions at a major mine in Mozambique and issues at new international projects.Adding to supply tension, the US has imposed tariffs on both natural and synthetic graphite from China. These could rise dramatically, as American producers have requested anti-dumping tariffs as high as 920%, alleging unfair trade practices.As the continent’s only producer, Northern Graphite has been calling for increased support for the LDI mine. We don’t want the only producing graphite mine in North America to be shut down. It’s like killing the golden goose,” CEO Jacquemin told Reuters earlier this year.”Production boost“This strategic investment in the Northern Graphite expansion project will enable the production of these minerals and strengthen our economy and security while keeping good jobs in Quebec — a win-win for the province and the entire country,” The Honourable Tim Hodgson, Minister of Energy and Natural Resources, added.The C$6.225 million funding, which takes the form of an interest-free and unsecured contribution, will allow Northern Graphite to immediately begin work on extending the existing pit to increase its production of the critical mineral.The pit extension is based on the LDI resource estimate published in January 2024, which outlined 3.3 million indicated tonnes at an average grade of 6.4% graphitic carbon (Cg), containing around 213,000 tonnes of Cg, plus 1.4 million inferred tonnes averaging 7.4% Cg containing approximately 106,000 tonnes Cg.The goal is to break ground as soon as possible to ensure a continuous flow of material to the plant, and first production from the new zones could take place in 6-8 months, the company said. In the meantime, it plans to continue processing ore from existing pit and ore stockpiles through the third quarter and fulfilling orders from inventory thereafter.Repayment of the contribution will commence 36 months following the project completion date with 84 equal monthly instalment payments.Weiter zum vollständigen Artikel bei Mining.com Weiter zum vollständigen Artikel bei Mining.com