Federal investment in a new graphite project should benefit electric car development. 

Renascor Resources Limited has received a $185 million conditional loan from the federal government to mine the “world's second largest graphite deposit” - the Siviour graphite deposit, near the tourist and fishing town of Arno Bay in South Australia. 

The $205 million project includes new facilities to manufacture “purified spherical graphite” (PSG) - a substance suitable for batteries.

This type of graphite is a key material in the production of lithium-ion batteries, which are used in electric vehicles, smartphones and a wide variety of other applications. China is currently the only country in the world that produces PSG.

The loan is conditional on assessments including environmental studies and approvals from both the South Australian and federal governments.

If it goes ahead as planned, the project should be able to produce 28,000 tonnes of purified spherical graphite and employ at least 200 people in its initial phase.