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Mining company Renascor Resources Limited has received a $185 million loan from the Australian federal government to begin mining graphite in South Australia’s Eyre Peninsula.

The conditional loan is expected to aid the $205 million project, hoping to make Australia a global player in supplying the critical resources needed as the world begins to shift away from fossil fuels.

Graphite is used in the production of lithium-ion batteries which in turn are used to create electric vehicles and other technology.

Three manufacturing facilities are expected to be established under the proposal in order to create Purified Spherical Graphite (PSG) which is suitable for the batteries.

“In 2021, lithium [demand] exploded, and we think graphite has the potential to do that, which means there’s an opportunity to build what will be a major industry in South Australia for many years to come,” Renascor’s managing director, David Christensen said.

Construction is expected to begin in 2023 with full-scale production by 2024.

“We have to demonstrate we have done all the fine engineering to a very high standard, all the regulatory approvals need to be in place — then we need to secure a market,” he said.

“At that stage we would hope to meet whatever conditions we have with the Australian government as the lender, then we build the facility, then we start producing.”