This comes after the company advised it has signed binding share purchase agreements to acquire 70% of European graphite producer, Zavalievsky Graphite (ZG).

Let's look further into the graphite and gold explorer's new acquisition.

Breaking into graphite

According to Volt, the acquisition will see it move from graphite explorer to graphite producer and place it in a more secure position than that of its peers by removing greenfield financing and development risks.

ZG owns a graphite mine, with processing facilities located approximately 280 kilometres south of the Ukraine capital Kyiv and 230 kilometres north of the main port of Odessa.

Volt states that its acquisition will immediately make it one of only a few graphite producers on the ASX.

The acquisition will see Volt take a 70% stake in ZG at a cost of US$7.6 million over two instalments. The first instalment is due upon purchase and the second is due six months later.

According to Volt, the ZG business is close to key markets with significant development of lithium-ion battery facilities planned to service the European electric vehicle market.

Volt stated in its release today that ZG produces "green purified 99.5% TGC (total graphitic content) product". Additionally, the business has the potential to increase its large flake production and has a long production life.

ZG has plans to install a processing plant and equipment to begin production of spheronised, purified graphite for the European lithium-ion market in the next 12 months.

Commentary from management

Volt managing director Trevor Matthews commented that the agreement is a significant step for the aspiring graphite producer. He said:

The acquisition of a controlling interest in the ZG Group positions Volt years ahead of its peer graphite companies and without the usual development risks associated with a greenfield project…

Following Volt's recently announced membership of the European Battery Alliance providing Volt with access to business development opportunities and a business investment platform, the ZG Group acquisition has the potential to make Volt a key participant in the supply of graphite and battery anode materials into the growing European market with excellent access to other markets in the USA and Middle East.

Volt Resources share price snapshot

The latest news from Volt Resources is boosting its share price again, adding to the company's great year on the ASX so far.

Currently, it's up 150% year to date. It's up by the same amount over the last 12 months.  

The company has a market capitalisation of around $47 million, with approximately 2.3 billion shares outstanding.

The post Why is the Volt Resources (ASX:VRC) share price surging 20% today? appeared first on The Motley Fool Australia.

The only problem is that the cause of the coal price rise could be about to disappear into thin air.

Coking coal prices have more than doubled since the start of this year from around US$75 a tonne to around US$200 a tonne in the past week.

Coking coal is used in steelmaking along with iron ore and differs from thermal coal which is used primarily as a source of energy.

Source: S&P Global Market Intelligence

The main reason for the price rise was China's decision to limit its coal mines to producing just 276 days a year – instead of the previous 330 days. A lack of volume thanks to a series of unexpected interruptions appears to be exacerbating the issue as Macquarie analysts have noted.

But the analysts also say that most coking coalminers sell their product using long-term contracts, so very few will be receiving the current high spot prices for their coal. One exception is BHP Billiton Limited (ASX: BHP), who's coking coal joint venture is the world's lowest cost producer and dominates the spot trade according to Macquarie.

Benchmark thermal coal prices have also jumped – but a relatively sedate 47% since January 1, again over restrictions placed on Chinese coalminers.

The problem for thermal coal miners is that China's economic planner has reportedly just signed an agreement with 74 coal miners to allow them to increase production by 500,000 tonnes each as long as the Bohai-Rim Steam-Coal Price Index stay above US$75 a tonne for two weeks. China's coal output declined by 10% in the first 8 months of the year, compared to 2015 according to China's National Development and Reform Commission (NDRC) and CaixinOnline.

Foolish takeaway

Given China's position in the coal sector, coal prices could rapidly descend and take the miners' share prices with it. Look out below.

The post Coal companies are soaring but may be about to hit turbulence appeared first on The Motley Fool Australia.