Lithium Energy is set to sell graphite assets in Queensland to Australian high-grade graphite and vanadium developer M Battery Materials (MBM) for A$20 million ($14 million).

MBM, which has existing graphite and vanadium assets in the state, is planning a minimum A$15 million IPO and seeking a listing on the Australian Securities Exchange (ASX) as a specialist battery materials firm.

The companies said in an ASX announcement on May 26 they had entered into a conditional share sale and purchase agreement for the sale of Lithium Energy’s 100% stake in three projects in central Queensland, comprising A$5 million in cash and A$15 million in shares in MBM.

Lithium Energy, a minerals explorer and developer, will now seek shareholder approval on the agreement, while MBM said its focus will be on developing and supplying minerals and materials critical to the global energy transition.

The sale of the graphite assets will be through the sale of Lithium Energy’s 100%-owned Axon Graphite to MBM. Completion of the deal is subject to various conditions, including confirmation of MBM’s suitability for admission to the ASX.

MBM was established as a critical minerals investment and development platform and is currently a proprietary company. It will be converted to a public company ahead of issuing its IPO prospectus.

Executive chairman of Lithium Energy, William Johnson, said the firm had already consolidated other adjacent deposits to create a world-class inventory of high-grade graphite in Queensland.

“Combining these graphite deposits with the neighbouring graphite and vanadium assets held by MBM will create an even more substantial and diversified battery minerals asset base.”

Batteries International reported last month that Australia’s battery materials recovery sector had the potential to be worth around A$7 billion to the national economy by 2050.