Sarytogan Graphite (ASX: SGA) has reached a pivotal milestone with the official granting of a mining licence for its Sarytogan Graphite Project in Kazakhstan. This approval, provided by the Ministry of Industry and Construction of the Republic of Kazakhstan, sets the stage for the company to transition from exploration to development at what is widely regarded as one of the largest and most advanced graphite deposits in the region.

The licence encompasses an area of 8.88 square kilometers and is granted for an initial period of 25 years, with the right to extend for an additional 20 years, followed by renewals until the mineral resource is fully extracted. This long-term licence provides Sarytogan with a secure tenure to develop the project sustainably, in line with Kazakhstan’s mining regulations. The move comes at a time when the demand for graphite, particularly in the electric vehicle (EV) and battery industries, is expected to surge, positioning Sarytogan to play a significant role in global supply chains.

Securing the mining licence involved a comprehensive process led by Sarytogan’s 100% owned Kazakh subsidiary, Ushtogan. This included negotiating a land access agreement, obtaining approval for a closure plan from Kazakhstan’s Ministry of Emergency Situations in August 2023, and converting the company’s 229 million tonnes of mineral resources from the Australian JORC Code to the Kazakh KAZRC code. These steps ensured compliance with local mining laws and the project’s long-term viability.

One of the key features of the mining licence is the relatively low minimum expenditure requirement, which sets the financial bar at 8,938 Monthly Calculated Indicators (MCI) per year. The MCI is an inflation-indexed metric, with the MCI for 2025 set at 3,932, translating to a minimum expenditure of approximately 35.14 million Kazakh tenge (around US$67,000). This expenditure requirement is significantly lower than the threshold under the previous exploration licence, which reflects a more favorable and economically viable operating environment for the company as it progresses towards commercial-scale operations.

Sarytogan is advancing its Feasibility Study by processing a 20-tonne sample from trial mining in Kazakhstan. The sample will be sent to Australia for flotation testing in early 2025 and then to the U.S. for purification. These steps are crucial for assessing the deposit's commercial potential and supporting the Feasibility Study to secure financing and finalize development plans.

Sarytogan has also started engaging with potential customers for trial sample deliveries, reflecting its proactive strategy to establish relationships within the growing graphite supply chain, particularly for lithium-ion batteries and energy storage. The mining licence, along with advancements in the Feasibility Study and early customer discussions, positions Sarytogan as a key player in the global graphite market. The company is set to benefit from increasing demand for critical minerals and Kazakhstan’s supportive mining environment, attracting international investment. Further updates on progress and customer engagement are expected in the coming months.