Transcript
Automated transcript · Written by software from the replay's audio. It can mishear names and figures; the replay is the record.
0:11 I was a long time investment banker. I was actually the first investment banker in Canada focused on renewable energy and clean technology. That was beginning about 2000, late 2000, early 2001. So I've been an investment banker for quite a long time. Ran a full service investment dealer, which had sales, trading, investment banking and equity research that focused on renewables, clean tech, especially metals, battery metals, and some conventional infrastructure as well. And then more recently have been more of a principal investor, so a direct investor in companies, mostly in the same sector as renewable energy mostly.
0:56 I co-founded a company that was called South Asia energy management systems, which became the largest hydro company in Sri Lanka. So we built, I think it was 13, 14 hydro sites, employed a lot of people, invested a lot of capital. We brought in about $100 million into the country and built a very successful company that then became a large hydro developer in Uganda as well. So taking all the talent that we built in Sri Lanka and developing new projects in Uganda. So we've got a long track record of operating in Sri Lanka and I should point out that most of that investment was actually made before the domestic conflict, the civil war that was there for many, many years before it was concluded. So we were one of the few risk capital investors.
1:48 And that was really the genesis of Ceylon Graphite because we had a very good relationship with the government, with the local communities, and it had a successful venture there that was exited about 4 or 5 years ago.
2:04 I'm the founder of Ceylon Graphite. So I founded the company in about 2011 as a private company that then secured most of the historic production of graphite, most of those sites that were previous producers we secured beginning in 2011 and then of course took the company public a few years after that and to this date I am still the largest shareholder of the company and also the largest investor of cash into the company as well.
2:40 That is true. Yeah, I before going into investment banking, I was the senior policy advisor to the Minister of Energy in Ontario and was heavily involved in, at the time, the breakup of the old Ontario Hydro and the introduction of competition into the energy sector. And through that was really the original policy framework of bringing in independent power producers, mostly on the renewable sector. So it was really the first opportunity for renewable companies to come in and invest. So again, we're on the legislative policy side, but since then have continuously been involved in, you know, really some of the early policy development, even some of the early United Nations SDGs related to the environment.
3:28 I was the vice chairman of World Wildlife Fund, which is the largest species protection conservation organization globally. I was the vice chair of the board in Canada. I'm currently the chair of Nature United in Canada, which is the Canadian division of the Nature Conservancy, which is the world's largest conservation organization. That organization is heavily involved all around the world in policy ranging from carbon mitigation to nature-based climate solutions. They're even working on debt for nature deals with different countries to protect areas in perpetuity. So quite involved there, both in Canada and beyond.
4:21 We've had a series of delays during COVID. The country was pretty much shut down. It was very difficult to mobilize. As you have probably seen, there was a recent announcement that we have modified the agreement with our local partners, and we are now in a position to start commercial production imminently. So we're quite excited by that. The delays are over and we're excited to get into production and go into the next phase of expansion, scaling up production, and of course, trying to conclude the negotiations that we've been having with different offtake partners and OEM partners on the auto and battery side.
5:10 Well, one of the clear advantages is the high grade of product that's not found anywhere else. So being able to produce 90% plus carbon naturally in situ at that high grade is a huge advantage because it then avoids the requirement for primary processing and provides a product that can be shipped very easily at very high grade straight out of the ground to wherever it will be upgraded with our partners. So that's a massive advantage that of course has a significant environmental advantage, a huge environmental advantage. And that'll be seen in our lifecycle assessment of environmental impact, but also of course cost. The cost is dramatically lower when you're mining a 90% plus product versus a 7 or 8% product that then has to be crushed, milled and floated before getting to a higher grade, which is even then usually lower than what we're pulling out of the ground right away. So it's a tremendous advantage at mining costs, environmental advantage, and then of course with the upgrading we're starting with a much higher grade, hence requiring a lot lower thermal input to upgrade that product to the end product required for the annual material.
6:32 Yeah, the vein production is significantly lower cost. So our mining costs, we've announced that around $200 a ton. And again, that's at a 90% plus carbon material. So very, very much significantly lower than any other graphite form of production. And that's a big competitive advantage. But more so, we think that the environmental footprint, the lifecycle environmental footprint, the fact that it's a non-Chinese supply which a lot of the OEMs are looking for is another significant advantage.
7:14 Yeah, with vein graphite we are avoiding the primary processing which is a significant energy requirement normally for most graphite producers Because we're coming out to 90% versus, you know, sub 10 in most other cases, we're able to avoid that primary processing, all that crushing, milling and floating to get it to a shippable product that can then be micronized, spheronized for anode material. The other big advantage is all of our mines are underground. So no open pit mines, everything is underground. And as I mentioned before, we also built in a previous company, a lot of hydro facilities in Sri Lanka. And so there's a big contingent of renewable power within the proximity of our mines as well. So our life cycle environmental footprint, I think, is going to be very beneficial and is of significant interest to battery manufacturers and OEMs.
8:17 We expect that the demand for electric vehicles is going to continue to grow significantly over the next few years, both because of policy demand and legislative force, but also because of consumer demand and consumer preference. We also think that eventually the prices of EVs are going to come down significantly. And we see that happening really because of the scale of production that you're seeing being announced almost every day with a new gigafactory, similar to what happened in solar. And solar prices went down by 15 to 20 percent year over year, even though there wasn't a huge technological advancement over the last 20 years. And that was predominantly because of supply chain management, manufacturing efficiency and scale.
9:03 And we expect the same thing to happen with lithium ion batteries and EVs.
9:12 Well, given that growth that we're seeing and the expected continued growth, we think that all 3 forms are gonna be in significant demand and some are projecting a deficit as early as this year in graphite. Most are blending synthetic with flake. And of course, we're the only producers really of vein graphite and only vein graphite is found in Sri Lanka. Because of the harmful environmental footprint of synthetic, we think that more battery manufacturers are going to be looking for more natural sources wherever possible. And within those natural sources, Bain Graphite has that significant demand improvement that we talked about earlier, environmental improvement that we talked about earlier because of the characteristics of being such high carbon content, no primary processing, all underground mining versus open pit. So we think that vein graphite is going to have a very strong future within the demand that's forecast.
10:17 Production. We've had many delays and we're excited to be able to move both K1 and M1 into production in the very, very near term and then scaling quite rapidly. And as you know, we have a very significant pipeline of additional concessions and grids, some of which we've done some drilling on, some VLF and other studies on, and we've prioritized other assets to bring into production. So we think there'll be a very steady scale up of production with additional resources coming online. And of course one of the biggest milestones will be securing a partnership with a battery manufacturer OEM and then looking at upgrading the material to anode ready material ourselves at our own facilities.
