The reactor deal generates revenue for 2016, but, licensing and collaboration arrangements promise further income from the partnership in the future.

Haydale will supply an R&D unit and a much larger HT200 plasma reactor

( ) has agreed a partnership with Metallurgical Group which sees the AIM quoted group supply plasma reactors to treat graphite from a mine in Sri Lanka.

It follows two years of partnership between the two companies, and paves the way for the development of a European centre of excellence for graphene that can operate at scale, supported by in-situ reactors.

Haydale will initially supply an R&D reactor (HT60) and a larger capacity reactor (HT200).

The reactor deal generates revenue - Haydale says it is expected to constitute a “significant proportion” of 2016 revenue - but, licensing and collaboration arrangements promise further income from the partnership in the future.

It is anticipated that Haydale and AMG will work together on projects for specific industrial customers in the composites, inks/dispersions, energy harvesting and lubricants sectors.

They also plan to collaborate on commercialising certain products that Haydale has developed.

AMG will also have a non-exclusive licence use Haydale’s patented process, which could in time give Haydale a royalty income stream based on net revenue received by AMG. Haydale noted that the rate and quantum of royalties would likely depend on market size and product pricing.

Haydale chief executive Ray Gibbs highlighted: “It brings a development partner with not only sales reach but crucially a supply chain of exceptional quality and a vast array of high quality carbon based materials for use across our joint target markets.

“Provided that delivery of the reactors is on schedule, the income from the sale and commissioning of the reactors will underpin the Group's expected revenue in the current financial year."

Frank Berger, president of AMG’s graphite unit, said: "The collaboration with Haydale will contribute to AMG Graphite's development of strategic graphene and functionalised graphite products for high end applications.

“We look forward to working with Haydale to develop processes and work towards producing and selling Graphene products and master batches on an industrial scale."

It is expected that Haydale will deliver the reactors to a specifically built facility in Hauzenberg, Germany by June 2016.

The HT200 reactor is much larger than the R&D HT60 reactor. It is a scaled up version, which can treat around 8 times more material.

Haydale said it will carry out site commissioning, and will provide ongoing maintenance, supply of spare parts and full technical assistance to support the operation of the reactors.

The company’s patented technology ‘functionalises’ graphene using plasma reactors.