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Green Critical Minerals (ASX:GCM) has inked a binding deal to supply thermal management products to Sydney-based data centre player GreenSquareDC.
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While the supply of thermal materials mightn’t sound too sexy, which would be fair because it isn’t, there is one thing to note about this deal.
GreenSquare DC is the subject of a buyout bid from Swiss private equity Partners Group (PG), a fairly big fish as far as that side of the markets goes.
All in all, PG want to snatch up GreenSquare DC for $1.2 billion. Not a cheap change deal (but far off the big data centre story of last year – Blackstone’s purchase of AirTrunk for $24 billion).
How much of that money could flow to Green Critical Minerals on the back of its deal with GreenSquare remains to be seen, and definitely comes down to whether or not GreenSquare feels it’s worth their time.
This is a “collaboration agreement,” after all, despite it being binding.
For now, the company is focused on its own product with regards to this deal, Very High Density (VHD) graphite.
Graphite is often remarked as the forgotten battery metal, or at least it was when lithium was the bee’s knees. But its applications are myriad – though a lot of the world’s graphite is used to make crucibles for smelting other metals.
There’s also the issue that Australia has a skint graphite manufacturing capacity, and that specialised forms of graphite are often highly complicated to process and refine.
For context, Green Critical Minerals has a market cap of $17 million.
But it’s not like the company isn’t aware of this. And in GCM’s defence, should it need one, it did describe its VHD product as an “emerging” technology on Wednesday.
The same reason graphite is good for making massive industrial-scale crucibles is why GreenSquare are taking an interest: graphite is highly heat resistant, and data centres, humming with thousands and thousands of servers, get very hot, very quickly. The colder the better.
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But in the Australian context, you can only get so cold. Enter VHD Graphite to mitigate some of that overheating potential. At least for now, at concept stage.
GCM last traded at 0.9cps.
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