00:00Tell us more about this investment and what the implications are for Carbonscape.
00:07Good morning, thanks for having me. Yes, this is a significant milestone for Carbonscape.
00:12We've been working and developing this unique technology for the last few years,
00:15and today we're receiving the backup from the largest battery cell maker in the world.
00:20What it means for OEMs and cell makers outside of China is that finally they have a solution
00:25to diversify away from the oil market, which is today the main feedstock used to produce graphite.
00:31And they're also finding a way to source a more sustainable graphite material that can be produced locally,
00:36within Europe, within the US and ex-China at competitive costs.
00:43How important is that diversification and how much of an impact do you see on production ability
00:50from these broader sort of macro influences, right, such as an energy crisis and disruption that we've seen?
00:59It's becoming increasingly important, especially within Europe and North America,
01:04even for Chinese players who have built battery capacity capacities in Europe, like CATL.
01:09They realize that if we are going to build traditional conventional graphite assets within those regions,
01:16they are not going to be cost competitive and the pricing is going to be very volatile
01:20because it's indexed on all markets, which is why it's very important to be able to develop alternative technologies,
01:26such as producing graphite from local forestry resources, which is much more stable from a cost perspective
01:31and also much more sustainable and available widely across most regions, including the Middle East.
01:40Tell us about the cost advantages when it comes to this technology.
01:46So it's mostly two things. The first thing is when you source wastes or residues from the forestry industry,
01:52it is much cheaper than sourcing an oil-based product such as pet coke.
01:57But it also comes down to the energy requirement when it comes to converting an oil-based product into graphite,
02:03which requires up to 3000 degrees during the production process.
02:07When you convert wood products into graphite, you only need half that temperature.
02:11So you're saving on energy and you're saving on feedstock costs.
02:17How do you view the economists' view and the sort of research views that there's a looming deficit when it
02:24comes to the global graphite market?
02:26What's your view of that?
02:29Yes, so currently the graphite market going into battery application is around 2 million tons per year
02:34and is expected to grow by a double digit per year for the next 10 years.
02:38However, when you look specifically at the European and North American markets,
02:43the deficit is expected to be 1 million tons by 2030.
02:47So basically half of the size of the global market today.
02:50There's no capacity being built in those regions because, as I mentioned earlier,
02:54those assets are not cost competitive.
02:57So we need to find new ways of pushing graphite so we can build those assets locally
03:01and we can help European and North American OEMs to both de-risk and also decarbonize the graphite supply.
03:08In the European and US markets, as you mentioned, graphite is considered a critical mineral.
03:13And I do wonder with that China and Hong Kong based investment into Carbonscape,
03:18are there sensitivities when it comes to this product for your company?
03:25Well, Heidi, as you mentioned, currently 95% of graphite is produced in China,
03:29which also means that most of the expertise when it comes to producing graphite is located there.
03:35So we are using Asian expertise to be able to de-risk Western supply chains.
03:40And eventually the goal for us is to produce in those regions, not in China.
03:45But also the investment from CATL doesn't mean they are a majority shareholder.
03:50We remain an independent company.
03:52We are taking our own strategic decisions when it comes to developing our assets.
03:56So we don't see it as an issue.
03:59We know that Europe is actually very welcoming when it comes to Chinese investments
04:02because they know that if they want to be able to meet the goals of electrification,
04:07they need Chinese technology and they need Chinese players within the European market.
04:12I wanted to ask about scale finally.
04:15Can you give us an indication of the timeline production targets?
04:21Absolutely. So we've been running our plant in New Zealand for the last few years.
04:25Now with CATL, we are going to scale up to what we call a demonstration plants using their facilities in
04:31China,
04:32using their expertise and their workforce.
04:34And eventually we want to get to a final investment decision for first industrial scale plants by end of 2027,
04:42early 2028,
04:43which means that we can start supplying the markets with our biographite by 2029, 2030
04:49and support OEMs and cell makers locally.
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