Session. If we're unable to deal with them all, the company will revert after the webinar with some responses. With that, I'll now hand over to David Christensen to deliver his presentation. David, over to you.
Great. Thanks, James. And thanks as well to those of you who are listening to this webinar. I see the numbers are pretty high, which is great to see. I'm sure many others might be listening to this in replay. I'd also like to thank. As James mentioned, we got a number of questions which we're eager to get into. Please, during the presentation, I think we have functionality for you to submit questions as they come up. With that, look, let's get stuck into the presentation. Renascor Resources, for those of you who may not be familiar with the story, we have discovered and are now developing what's become one of the world's largest deposits of graphite here in our home state of South Australia.
Our plan at Renascor is to take advantage of the fact that we have this truly world-class resource, not in China, not in Africa, but here in Australia, a modern industrial jurisdiction, a low-risk jurisdiction. That gives us the opportunity to produce not just a mine product, but to move one step further down the value chain and produce a purified spherical product that can be delivered directly to the high-growth area in the graphite space to lithium-ion battery and/or manufacturers. As a graphite mine, we have the potential to be amongst the lowest-cost producers of an increasingly valuable product to the world market. By moving one step further downstream, we have the potential to be a world leader in purified spherical graphite. This is becoming increasingly important as the world moves away from dependence, in particular, on China.
With that in mind, let's touch on the market a bit. The market for graphite fits into one of the battery minerals, and the growth market here is lithium-ion batteries. We've shown slides like this before on the right where you see battery demand, which is critically important for where we are. I think the key point here is we're at the beginning of a paradigm-shifting event that's opening up new opportunities for companies that can deliver into this high-growth area. What we'd really like to emphasize here is we're at the beginning of a trend, but there's a clear trend you can see with high growth each year. A large part of this is because of the efficiencies of lithium-ion batteries. We show here on the left the global weighted average cell price, which is going down each year.
We had a similar chart here previously when we had a number in the mid-60s. Global cell prices are now below $60 per kilowatt-hour. That just reflects the efficiency. We have really passed the point of no return. We know that commodity prices go up and down, and that has certainly impacted the graphite sector. The kind of growth in the lithium-ion battery space and the kind of growth that therefore is going to need graphite is the kind of growth that outlasts commodity cycles. It outlasts political cycles. If we look at where we are now in the cycle, what are the current trends on lithium-ion battery? 2025, it has really been more of the same. Battery demand continues to increase, and that is being driven by global EV sales increasing. Up to date, 28%. Year to date.
If we look at the markets we're focusing on as an Australian company selling into the West, EU sales are up over 25%. Even in the United States, where despite the loss of the consumer vehicle tax credits, we're still seeing significant increases in EV sales. Maybe one of the new pieces of particularly relevant information for starting ex-China supply chains, so supply chains outside of China, is what's happening in stationary storage. This is the fastest-growing segment. That, again, uses the same lithium-ion batteries that go into electric vehicles. We've all probably read a lot about some of the increased stationary storage demand that's coming out of artificial intelligence and data center demand. What stationary storage is able to do is provide grid stability. We're also seeing grid power move to further away locations and becoming decentralized.
Again, stationary storage is an important element in allowing that to happen. The other global trend is for more wind and more solar. Variable powers that need stationary storage in order to provide regular power to the grid. Now, one of the key differences of stationary storage is, in the past, we looked at a lot of government support that was going into lithium-ion battery that was largely driven by two fundamental concerns. One was a move away from fossil fuels. The other was simply economic security with the general notion that the auto industry needed to be able to produce electric vehicles in order to survive. These things are certainly true. What's changed now with stationary storage and its importance is now lithium-ion batteries are a matter of energy security and national security.
This is driving some of the big policy movements that we're seeing in order to ensure that there's secure supply chains going into the growth market. If, again, we look at the West, and again, as an Australian company, we're targeting supplying our material into Western markets. We can look at battery demand in the United States, battery demand in the European Union, which, again, is going up. It's rising from 2024 to 2025. There is a problem. The problem we're seeing in particular is the significant dependence that lithium-ion battery manufacturers in the United States, in the European Union, have because they're relying on China for the vast majority of the anode material, where, as graphite prices have suffered over the last couple of years, the Chinese have doubled down on production capacity and now have a near monopoly.
This creates real difficulties for security of supply in the West. This has given rise to a lot of movements from, I guess we could say, on the geopolitical side that really is threatening to turn the industry on its head. We can start with what is happening in China. China, for the third time this year, threatened to withhold exports of anode material. They did the same thing in 2023, 2024, 2025. What they are doing is they are using their domination in the sector for leverage, leverage in trade negotiations as large trade agreements are worked out, in particular between the United States and China. We have seen similar treatment by the Chinese with rare earths.
The graphite anode sector has a lot of parallels with rare earths in terms of Chinese domination, in particular into the refining capacity and the dependence of the West on the Chinese for what's becoming a matter of national security. What's the U.S. doing in response? The U.S. is the one country in the world that has both the scale in terms of a market and the regulatory framework to do something about this. We've already seen some specific measures being implemented towards China. We have a chart here that goes through some of the current tariffs and duties that apply towards graphite. Part of this relates to general duties being put, general tariffs being put on all Chinese products.
With respect to graphite and anode, the United States is increasingly turning their attention to the difficulties of securing almost all of their supply from China. We already have a preliminary countervailing duty case that has established a plus 100% tariff on Chinese anode material. We have what they call Section 232 investigations, which, again, is for national security, that are currently ongoing investigations that have the potential, again, to really prevent Chinese material from coming in and opening up the market and creating an ex-China market. We can look at the parallel to rare earths and what we've seen in the sector and the ability of the United States to quickly change and become a market maker. It looks like they're increasingly turning their attention to graphite and anodes, which bodes quite favorably for us. Here in Australia.
Our own government is building frameworks here to support these ex-China supply chains to allow us to do what we do well here in Australia, which is to mine our fantastic deposits. The other opportunity is to move one step further and refine that material so we can capture more value. We have a number of policies already in place with the Critical Minerals Facility. That's the $4 billion facility. We have a conditional loan agreement in place for our own project. Australia is really looking even further at supporting mineral projects here. There's the proposed Critical Minerals Reserve Fund that the current government is looking at. I think we've all seen recently our Prime Minister going to the United States to meet with President Trump and concluding a U.S.-Australia Critical Minerals framework that really establishes Australia as a key partner in that growth. Now.
While this policy plays out really on the global stage and we advance our projects here in Australia, our own customer base isn't sitting still. They're moving. The tier one anode suppliers are expanding into this ex-China market. If we look at the anode market, it's dominated by the Northeast Asians. In fact, it's almost exclusively the Northeast Asians who are supplying anode material into the Western market. They're growing. They're expanding. They're expanding in Korea. They're expanding in Japan. We're even seeing Chinese companies move offshore. The one parallel, the one thing in common all of these anode makers have is they want to establish supply chains that don't involve China in the production of anode material. They all need secure supplies of graphite, purified spherical graphite from outside of China.
This plays very favorably into what we're doing because, again, we have the potential to be a market leader in this sector. Now, our own project, and again, a bit of a refresher for those of you who aren't familiar with the story. We are vertically integrated. What that means is we're combining two operations. A traditional mining operation will be producing a graphite flake concentrate, and then we'll be doing the initial refining, where we shape and we purify the material. Then that gets delivered to an anode manufacturer who coats the material before it goes on to a lithium-ion battery cell maker who makes the battery before it goes into a stationary storage unit, an electric vehicle. Now, we think we can do this really with a pretty unique set of cost and security parameters on the project. It starts with the deposit itself.
Siviour is large. It's one of the largest graphite deposits in the world. Probably more important than being large, Siviour is competitive. It's globally competitive in terms of its operating cost, in terms of its capital intensity. Finally, we're development-ready. We have all of our major regulatory approvals in place, both for the mine and now for the downstream facility. After we got our provisional authority for Bolivar to do the downstream PSG plant, we have an Indigenous Land Use Agreement in place. We've completed our studies. Obviously, we purchased the land. We are really a development-ready project that is ready to move into this ex-China market. We offer more than being just a mine. By moving downstream, we're transformed into a battery minerals company. Why is that important to us?
It is fundamentally important because the production of purified spherical graphite gives us direct access to the high-growth sector, to lithium-ion battery anode makers. Good customers, the kind that can underwrite the scale we need to get started. It also allows us to rely on our know-how and our competitors, something that we do very well in the Australian sector, which is the refining and engineering sectors. That really underpins what we are doing in advancing our technology to purify graphite. Finally, the value of vertical integration and producing not just a mine product, but moving one step further is it gives more to Renascor, gives more to Renascor shareholders because we are producing a higher-value product. Again, producing graphite concentrates, we have the potential to be amongst the lowest-cost providers globally.
Going one step further downstream, we really see a competitive advantage where we can be the lowest-cost producer outside of China. Again, this is something we've talked about before, but why we think we have a competitive advantage going downstream really starts with leveraging off the low cost we're going to get from our mining operation. There is a logistical advantage as well because we don't take our material, ship it to an alternative site offshore, upgrade it there, ship it to another site. We take our material from the mine, we upgrade it on the way to the port before we go directly to the customer. We can do that because we're in a low sovereign jurisdiction. We have not only the industrial capacity, but we have the security to be able to do this higher-value-added material.
I really want to emphasize one of the advantages we have here being in Australia is we have not only a mining sector, but we have an advanced engineering sector that allows us to derisk the necessary steps to build that larger-scale operation and move into the downstream side. What are we busy on now? On the upstream operation, we're doing everything we can to get this mine ready to be built and be built as quickly as possible. I think we've discussed in our previous sessions some of the early contractor work we've done to improve the engineering, to confirm capital costs. You see a picture there of upgrading the grid so we can get direct grid access to site. We purchased the freehold land in which the mineral sits. We recently secured a site for our accommodation facility and are currently working at developing that.
We have the site ready for construction, ready for the construction phase. That will also transition where a portion of the workers will have that available as well. Really, everything we're doing on this upstream side is trying to lower risk, lower cost, and lowering the construction phase so we can be in production as quickly as possible. On the downstream side, we're continuing in the same vein. You see a picture here of some of the graphite concentrates we produced from a bulk sample. We took a very large sample last year and went through a pretty long process to produce samples that we'll be able to use in our PSG demonstration facility here in Adelaide. That material is now being returned here to Adelaide. That'll be used in that PSG demonstration facility.
Probably worth pausing on what we're trying to accomplish with the PSG demo plant. We have been working on several years at trying to find the best way to purify graphite so we can sell it into the lithium-ion battery sector. We've adopted a technology that the Chinese are already using, but we're adapting that to the West. In particular, we're not using hydrofluoric acid, which has some real environmental advantages, but it also has cost advantages. That's largely because of the environmental regulations in any Western jurisdiction. We have a way that we can do this that has not only an environmental advantage, but a cost advantage. We got a grant from the Australian government, a AUD 5 million grant. That grant was supported by some of our key strategic partners, POSCO, Hanwha. We're currently building that facility.
I think we've put out several releases that are talking about the progress, but we're well into the construction phase right now. This is a large project for us. This is the single largest project we've undertaken as a company. This is a very large facility we're building here. You can see some of the photos, but we're nearing the back end of that phase now. We expect to be commissioning, commencing on-site commissioning this quarter. That'll put us into the operational phase of the demo plant the first quarter of next year. This is really the last technical step we need before we can build the commercial plant. That's a good segue into a large part of the reason we're doing this, which is to support our offtake efforts. And our.
Offtake is largely based on aligning ourselves with the leading suppliers of anode material to the Western markets. We already have non-binding agreements in place with some of the key players, POSCO in South Korea, Mitsubishi Chemical in Japan. What we offer these anode makers is what they need to expand, to expand their market share into the Western markets, which is a secure and competitive supply chain outside of China. Over the last two years, the graphite market, the anode market, had been weak. We've seen some real significant pressure as Chinese anode suppliers have driven down prices. We are now entering into a new phase. It is really being driven by the policy changes that are prioritizing supply chain security. The response to this from the anode makers is already positive.
We're already seeing major capacity expansions announced by the existing anode makers to service the Western market. A great example of the change in the market is new supply agreements. POSCO recently announced a major anode supply agreement with an American OEM. This is a clear signal, a clear real signal of a major shift. This environment bodes very favorably for Renascor. What these groups urgently need is reliable, non-Chinese graphite supply. We are one of the few companies that is positioned to meet this need and do it quickly. Exploration. In addition to doing the work on our flagship BAM project, we're looking at a number of what we consider high upside, low-cost prospects for discovery opportunities. Really giving shareholders an opportunity for major uplift through near-term drilling. We have a pipeline of projects.
The next cab off the bank is Bulloo Creek. This is a large magnetic anomaly where we have prospects for copper, cobalt, and gold near in the Olary section of South Australia. We've gone through site clearances. Just this morning, we received our regulatory approval from the Australian government, South Australian government. We now expect to be drilling this prospect in a couple of weeks. We're looking at other opportunities. We've expanded our base and acquired what we think is a really unique standout uranium target. We call it Mulgaria. It's part of our Marree project. A pretty unique story behind this prospect. The South Australian government did a major high-resolution airborne survey. This really unlocked data that wasn't available before in South Australia. As I think many of you know, we have an abundance of really good uranium.
Deposits, actual deposits, operating deposits here in South Australia. And Mulgaria really stands out as a sore thumb radiometric anomaly. That is really only rivaled from a radiometric signature point of view by Olympic Dam. We're working through the land access and community engagement process right now. We expect to be drilling this prospect next year. Look, I don't want to spend too much time going into further detail other than to maybe emphasize what's next. What are the near-term value drivers for shareholders? What's going to happen over the next couple of weeks and months? Quite a bit. We're now into exploration drilling. That's imminent. We'll be moving through that with Bulloo Creek and then moving into Marree early next year. You can expect a lot of news there as we start moving the drill rig. At the same time, we're working through.
That hard work we've been doing on the demonstration plan. We'll be moving into commissioning and then operating. We think this is critically important because what it allows us to do is to demonstrate not only that we have really a world-leading upstream project, but by doing the demonstration plan, that's the key to unlocking that downstream side as well. At the same time, we're working in parallel on finalizing offtake, on securing strategic partnering and financing agreements. That leads to a final investment decision. What looms large over everything we're doing in the graphite market. Although it's been a relatively weak period for the last couple of years, I think there's plenty of signs out there that things are changing and have the potential to change very quickly. With that.
I'll pause here, and hopefully, we have time to get to as many questions as possible.
Okay, David, thanks very much for the presentation. We have a number of questions here, so. Don't go anywhere just yet, David. We're going to continue to put you to work. Let's jump straight into it. The first question, and this continues to be topical, and I guess it will remain so, and that is, how will U.S. trade actions benefit Renascor?
Price. It has the potential to benefit price, right? The U.S. is the one market that is both large enough. And has that regulatory framework in place to address the pricing disequilibrium that's been caused by. Chinese domination in the sector. We've already seen preliminary. Duties of 100% on Chinese anode material. We have ongoing. Section 232 national security investigations on critical minerals and products. And that includes graphite and anode.
That has the potential to close out the majority of Chinese anode producers from the U.S. market. What we're waiting for now is certainty. We're waiting for final decisions on these countervailing duties and then Section 232. Our expectation is that this could double the current anode price. This would put us pretty close to back where we were in 2023 and open the market in the United States for ex-China anode producers. These ex-Chinese anode producers are going to need non-Chinese purified spherical graphite. Again, we anticipate being one of the most viable, one of the ready solutions when that happens.
Okay. All right. Quite a bit to play out there. Next question, why isn't Renascor receiving support like other companies, U.S. Export-Import Bank being, for people who don't know, abbreviated or capitals EXIM?
Yeah. The U.S. has been.
Fairly active in encouraging the use of its export credit agency, U.S. Export-Import Bank (EXIM), to support the development of manufacturing in the United States. In the past two years, EXIM has announced letters of interest for, I think, five integrated graphite-to-anode projects that are looking to develop anode capacity, so develop their capacity in the United States. We see this as a very strong signal that the United States is looking very closely at graphite and anode in particular as they try to create a viable ex-China market. Now, in our case, our plan is to build our initial downstream capacity here in Australia. We are doing this because that is the strongest competitive position, combining a low-cost mine with an efficient, low-cost initial refining operation. Since we are developing here rather than the U. S., our main export credit agency is Export Finance Australia.
Here, we've moved past initial expressions of interest into an actual conditional loan agreement under the Australian Critical Minerals Facility. We've gone through negotiations on financing and credit terms through due diligence. We're preparing for our final investment decision so we can actually draw on that loan. More broadly, the issue impacting the graphite and the anode market, and really the entire battery mineral space, is how to deal with unfair trade practices from China that's driving down price. That's what's preventing companies like us from drawing down on loans, whether they come from our own government, EFA, or from the U.S. through Exim. As the market moves forward, I think it's really reasonable to assume that things are changing, things are changing relatively quick.
That goes for us as well, as we would expand, and we would expect to have the ability to expand our financing operations as and when the market changes.
Okay. Thanks, David. Third question, is Renascor planning on producing anodes? Following on from that, why the focus on PSG?
Yeah. I guess our focus is on doing whatever we can to build the most competitive position possible so we can get into production as soon as possible. We are dealing with a market in transition as the anode market adapts to, on the one hand, expanding demand for the product from lithium-ion battery producers, but on the other hand, fierce competition from the Chinese. The anode market itself is pretty much a closed shop with currently six producers, all in Northeast Asia, providing nearly the entire supply of anodes to non-Chinese battery makers.
We've seen a number of mine-to-anode developers struggle to compete in this market, including failing to qualify in some cases, even losing support from battery makers. Really, this shouldn't be surprising because of the limited number of existing players. Players who are operating currently in undercapacity and are dealing with this fierce competition from the Chinese, who are really struggling to hold on to market share. If we look at Renascor, what we want is we want to develop as a competitive position as possible in this emerging market. As a graphite miner, we can compete on quality and cost with any project globally. By going one step further down the refining chain, we see an opportunity to have the most competitive ex-China supply of purified spherical graphite in the world. Look, the anode market will continue to develop. As it develops, there'll be a larger market.
There'll be a larger market for us, and that'll give us opportunities to move downstream. Right now, for us, the quickest path forward, the one that gets us into production soonest, is by cementing our competitive position. Producing purified spherical graphite.
Okay. All right. Next question. I think this is particularly relevant and pertinent for Renascor shareholders, and they'd be interested to hear your thoughts here, David. If you had funding today, how long would it take for the upstream project to be operational?
Yeah, not very long. On the upstream side, our build time is about 13 months. I guess the key to achieving this is certainty on design and access. This has been a large part of our upstream operation since the completion of our definitive feasibility study.
On the downstream side, just to add that in, we have a projected build time of about 18 months. Similarly, by moving forward now into our PSG demonstration facility, what that allows us to do is to cement those design parameters to reduce that time as much as possible.
This leads into the next question, which is around the demonstration plant. This is clearly the current main workstream. The question here is, what are the risks and opportunities associated with the PSG demonstration plant?
Yeah. I guess the largest risk that we're managing is cost, managing cost at scale. It's not really a process viability issue. The process itself is proven. Our demonstration facility is really about confirming that we can achieve the performance with cost efficiency under operating conditions that replicate what we're doing at scale here in Australia. We have adopted a known process.
We're using less aggressively corrosive chemicals than hydrofluoric acid, which is the primary reagent that the Chinese use in the bulk of their operations. We're doing this because it's simply more compatible with operating in a Western environment that has strict environmental handling requirements. The advantage is it's going to deliver better costing. That creates a real advantage for us at Renascor. We've gone through several years now of laboratory testing, both here in Australia and overseas. We've also worked through the detailed engineering studies to cost out the equipment needed to meet customer specifications. We're quite confident that our HF flowsheet will work.
The more important question we're trying to answer into the demonstration plant is how that technology scales up in our own environment here in Australia as we replicate that exact flowsheet, the one that we've been using in the laboratory, building it at scale. Put another way, this isn't really a technical risk. We've already seen Chinese commercial operations that aren't using hydrofluoric acid. It's an engineering challenge. It's about managing those costs through scale-up. The opportunity is stepping up to a larger scale and confirming our costs. In this way, we open up an advantage by not having just a low-cost mining operation, but having a cost advantage in downstream processing. To put this in the context of our potential offtake partners, the opportunity is to demonstrate to anode makers that PSG from Renascor is the most viable alternative outside of China.
Okay. Thanks for that.
Just changing focus just a little bit here. You did touch on your exploration plans during the presentation. Questions come in here. Why is Renascor ramping up exploration activities in other commodities? What does this mean for the BAM project?
Yeah. Look, our BAM project is absolutely our flagship project. It remains our priority and focus. I think, as we've discussed just now, we're really laser-focused on delivering on the material investment we've put in on getting that demonstration facility up and running. We are in a pretty fortunate position where we can look at other opportunities as well and give shareholders an opportunity for value uplift through near-term drilling. We have built up a very successful exploration team here at Renascor that's been behind some of the larger mineral discoveries in South Australia over the last several years. We also have a strong balance sheet.
Our goal here is really to offer our shareholders value uplift through near-term discovery opportunities. One of the challenges we see with any exploration project is timing. I think a lot of shareholders appreciate how long it takes now to get approvals, to get clearance, to get ready to drill. It is a process that takes not just months, but often years. We have, and we will continuously work to get projects ready to drill. The next cab off the rank for us is Bulloo Creek. We are scheduled to be drilling that again in a matter of weeks now. We are also looking at our Marree project. We think that is really an outstanding opportunity to expand outside of our own ground, get another drill-ready prospect. We have our own broader pipeline of projects, and we are continuing to look at other ground, other JV opportunities.
Really, the key thread about all of this is to get prospects that are at the drill-ready stage and offer immediate opportunities for real value creation.
Okay. All right. I think we've got time for one more question. Again, this is quite topical and current. I'll read this out. It says, "Do you view the recent critical minerals deal between Australia and the U.S.A. as a positive outcome for Renascor? And does it support the development for Renascor, and in what ways might it directly support the advancement of the BAM project?"
Yeah, absolutely. This has the potential to be an immediate game changer, not just for Renascor, but for other, in particular, Australian projects that can offer the U.S. a combination of tier-one mining projects and a strong economic case to replace Chinese initial refining capacity.
Really, those that have a case for being amongst the most economically viable ways to support U.S.-based end manufacturing. Again, the overarching issue impacting the battery minerals sector is price and what will happen from a trade perspective. This is developing, as we've discussed. It could change very quickly. What the U.S.-Australia Framework Agreement does is it establishes Australia in particular as a key partner in the United States' search for secure supply. We've recently seen how quickly the U.S. can move markets in the rare earth sector by effectively making an ex-China market. This has been good news for Australian projects that can feed into this market. We've seen some very positive news on actual funding, not proposed financing, but actual funding going into rare earth projects.
Graphite and anode have a lot of similarities to the rare earth sectors in terms of Chinese domination, in terms of national security interests. As the U.S. turns its attention to the battery sector, and graphite and anode in particular, this looks very positive for Renascor.
Thank you, David, as always. A pretty comprehensive set of responses there to questions from our audience. That does see us through as far as our time this morning. If there are any questions that we have not been able to get to, again, we will deal with these offline. They will be sent through to the company, and the company will provide a response. With that, I would like to thank David for his presentation this morning. I would also like to thank everyone for making the time to join us today and hear this update from David and Renascor Resources.
We will say good morning and enjoy the rest of your day. Thank you all.