New Flame Retardant Launched & Sales Contract

17 December 2020

Tirupati Graphite plc ('Tirupati' or the 'Company')

New Flame Retardant Graphite Composite Launched and Sales Contract Secured

Tirupati Graphite plc, the fully integrated, revenue generative, specialist graphite and graphene producer with operations in Madagascar and India, is pleased to announce that it has successfully developed and commercialised technology to manufacture flame retardant polyurethane foam ('FRF'), which conforms to Hazard Level 3 (highest level) of European Standard EN 45545 - Fire Protection on Railway Vehicles (the 'Standard'), and an expandable graphite based flame retardant composite ('FRC') for use in manufacture of the FRF at its Patalganga Plant in India. The FRC is being produced to the latest European approved Standard aimed at protecting passengers and staff against onboard fire incidents on railway vehicles and defines the requirements for the fire behaviour of materials and components including the foam used in passenger coach seats and berths, a Standard which has recently been adopted by the Indian Railways.

Overview

·    Tirupati has successfully developed technology to manufacture FRF, using FRC as the key component to meet the Standard at its Patalganga Plant in India

·    This follows an initial agreement (the 'Agreement') entered into with an Indian manufacturer of railway coaches (the 'Buyer') signed in June 2020, whereby Tirupati was appointed as a technology consultant to design and develop the FRF and FRC to comply with the Standard adopted by Indian Railways

·    The new products have been tested in an accredited European laboratory to meet the Standard and achieved approval from the Indian Railways for use in its passenger train seats and berths

·    Under the terms of the Agreement, the Buyer shall now manufacture the FRF and procure all its FRC requirements exclusively from Tirupati for a minimum period of three years

·    Indian Railways, governed by the Ministry of Railways, operates India's national railway system, one of the world's largest rail networks with more than 13,500 passenger trains daily and rolling stock of more than 64,000 passenger carriages which continues to expand

·    Following completion of successful FRF and FRC development, Tirupati has received an initial procurement order of FRC from the Buyer at a price exceeding US$4,000/MT, enabling the Buyer to manufacture enough FRF for 50 carriages with further sales expected on a continued basis

·    Tirupati intends to brand its FRC as "GrafEN 45545", shall retain all intellectual property ('IP') rights and is at liberty to licence the technology and sell its FRC to other parties globally, creating additional technology services fees and product sales opportunities for the Company

Shishir Poddar, CEO of Tirupati Graphite, said, "The product development for the manufacture of FRF, which satisfies the most stringent European Union ('EU') safety standards, demonstrates our ability to develop bespoke specialty graphite products for hi-tech applications at the highest regulatory standards.  It is such expertise that sets us apart and reflects the over 100 years of collective experience our team has in this niche area of flake graphite and its applications.

"We now have the ability to market the process and technology developed alongside a new FRC as a branded product into the EU and other parts of the globe while we continue to provide it for Indian Railways through the Buyer.  This initial order is the first in what we expect to be a much larger, new proprietary product market segment, which we expect to grow alongside our other product, CARBOFLAMEX® which is already being successfully produced and sold from our Patalganga plant. This product development and ongoing sales arrangement demonstrates our ability to continue expanding our market reach and we will continue to target new applications in line with our innovative, technologically driven and active market development approach."

Further Information

In November 2019, Indian Railways adopted the latest European Union requirements complying with Hazard Level 3 of European Standard EN 45545 - Fire Protection on Railway Vehicles (the 'Standard') for flame retardant polyurethane foam ('FRF') used in passenger coaches, seats and berths across Europe.  In June 2020 Tirupati entered into a Technology Consultancy and Offtake Agreement with an Indian manufacturer and registered supplier to Indian Railways of railway coaches and components, to formulate and develop a FRF sample, compliant with the new Standard for a total development fee of ~£20,000.  The key terms of this agreement are set out below:

•             Tirupati shall develop the formulation for and sample of FRF on best efforts basis, including the FRC required to achieve the Standard

•             The Buyer would pay a non-refundable development fee of ~£10,000 upfront and further ~£10,000 upon successful development of the FRF

•             Upon successful development of the FRF, the Buyer shall buy all its requirements of the FRC for the manufacturing of FRF exclusively from Tirupati for a minimum period of 3 years

•             Tirupati shall retain all IP and have no obligation to disclose any technical details except as is required by the Buyer for the manufacturing of the FRF

•             Tirupati shall be at liberty to licence the technology and sell its FRC to any party outside India or to any entity not being a supplier of FRF to the Indian Railways.

Tirupati developed the FRF at its Patalganga plant, and the product was successfully tested in an accredited European laboratory and achieved approval from the Indian Railways for use in its passenger train seats and berths.  Accordingly, the Company has received its development fee from the Buyer and the first sales order of FRC at a price exceeding US$4,000/MT has been placed, with further regular orders in the pipeline and other markets remaining open to Tirupati for development.

This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014. Upon the publication of this announcement, this inside information is now considered to be in the public domain.

** ENDS **

For further information, please visit https://www.tirupatigraphite.co.uk/ or contact:

Notes

Tirupati Graphite Plc is a revenue-generative, multi-asset, multi-jurisdictional, fully integrated producer and developer of high-grade natural flake graphite, speciality graphite and graphene, which captures the entire value chain.  With a unique set of properties, graphite has diverse applications with multiple growth streams and graphene forms the new generation of 2D materials. In support of this, the Company places a special emphasis on "green" applications, including renewable energy generation, energy storage and composites, and is committed to ensuring its operations are sustainable as well.

The Company's operations include primary mining and processing in Madagascar, where the Company operates two key projects, Sahamamy and Vatomina; 3,000 tonnes p/a of high-quality flake graphite concentrate with up to 96% purity is currently being produced and sold to customers globally, and this is planned to increase to 81,000 tonnes p/a by 2024 as per the Company's modular medium-term development plan.

In India, the Company processes and produces speciality graphite for use in hi-tech applications like lithium-ion batteries, fire retardants and composites. Its specialty graphite processing operations include the 1,200 tonnes p/a Patalganga Project, which was successfully commissioned in July 2019 to manufacture and sell CARBOFLAMEX®, a trademarked fire-retardant expandable graphite product.  At the next stage of development, Patalganga shall further be expanded to 4,800 tonnes p/a capacity with capabilities to also produce high purity and micronised graphite, so increasing market and product reach by 2021. The Company has developed unique green processing technologies for manufacturing these advanced materials.

After establishing itself in the specialty graphite markets through the Patalganga Project, an additional 24,000 tonnes p/a specialty graphite processing facility is to be established in two 12,000 tonnes p/a phases.  The plant will produce expandable, high purity, micronised and spherical graphite.  The west coast of India has been chosen as the location and a detailed feasibility study has been completed.  Tirupati is also in the process of establishing the Tirupati Graphene and Mintech Research Centre, a state-of-the-art R&D centre focussed on producing graphene, developing its applications, and further providing environmentally friendly technologies consultancy for mineral processing.  Land acquisition is in progress in Bhubaneswar, India, and a detailed feasibility study completed.