Investing In Graphite Part 2

Originally posted by Graphite ↑

Paul,
Your comments about Synthetic Spherical Graphite production and the need to add additional capacity when the demand starts to ramp up I believe is correct. To increase production capacity of Synthetic it will take a much longer time and higher CAPEX then to increase the production capacity of Natural Spherical graphite production.
Current China’s capacity of Natural Spherical Graphite far exceeds demand thus the Chinese can ramp up additional supply very fast when needed. The Chinese can also add new capacity within 1 year when needed. It will take a few years to add additional capacity of Synthetic Spherical Graphite

Thus any new or current Li- Lon producer will want to purchase their supply of Natural Spherical Graphite from China and fill up their existing low cost capacity. (China is an extremely low cost producer of this material)
Japan is only producing Synthetic Spherical Graphite and trying to keep their technology from the Chinese and others. This is one major reason why Synthetic is so much higher priced then Natural Spherical Graphite.
I assume the Kenmare flake will produce a equal quality to the Chinese Natural Flake Graphite currently used. We know the Kenmare has slightly lower ash (2 to3% vs. Chinese at 4 to 5%) but this small ash difference will have little effect on cost or quality. Thus it will come down to price? Which origin will be lower in cost to use to make Purified Spherical Natural Graphite Anode material.

The Kenmare flake is better suited for applications that need Jumbo and Large flakes because it floats easily to 97 to 98 % carbon. (Yes graphite flotation is mostly an Art) The issue for Kenmare and other Jr. Graphite Mining Companies that are all trying to market the higher value Jumbo and Large flake is the smaller worldwide market demand and the fact that the market demand will not grow as fast as the market demand will grow for lower cost Fine flake graphite used to make Li-Ion batteries. Yes producers of Li –Ion anodes can start out with a larger flake size and mill and shape the flakes to a powder just like starting with finer flakes sizes so the Kenmare and others Jumbo and Large flake graphite’s can still be used to make Li-Ion battery anode material. The only issue is then cost. Do the Jr. Graphite Mining companies want to sell their jumbo and large flake at close to the same selling prices as Chinese and other graphite companies that sell fine flake or do they prefer to mine less volume and only sell to markets that must use Jumbo and Large Flake and thus not build these mega graphite mines.
How interested in an investor in a small capacity Jumbo and Large graphite mine that produces only 10 to 15,000/mt per year capacity? My bet is most investors are not interested since the business is too small. Let me know what you and others think about this?

All or most of the future Graphite demand growth is going to come from Fine Flakes and not Jumbo and Large flakes. (I know not all investors believe this and this is one major issue the graphite industry has today. Graphite investors do not really understand well or think about what will happen if there is a major surplus of supply to Jumbo and large flakes)
I welcome yours others comments

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Thanks graphite,

That's a great post and it looks like you have genuine real life experience in the Industry, that is something myself and probably the vast majority of posters here do not have so thanks again for your insight/opinion.

I completely agree with you on the fine flake consumption in comparison to any current and growth large/jumbo flake market and uses.

I witness many posters on HC who sadly simply cannot and probably choose not, to take in the above theory and basic variants that may benefit particular end use and or products.

My question of Ancuabe flake was more reference its properties, such as its expansion and the temperature used/needed for the expansion.
I have been told if you can get good expansion at sub 1000 degrees and higher than 600/700 degrees then you're in goldilocks territory so to speak. This has been reported by Superior Graphite using Kenmare Flake. Perhaps this is why YXGC were apparently so quick to show their interest in the samples sent by Triton for example?
Again for example, knl/Tanzania have reported massive expansion but the problem for some use or difference, is that they had to achieve it at around 1300 degrees. This I have been told is way too high for certain applications. Like they say - all graphite expands and the higher the temp the more expansion. I would deduce the sweet spot for certain applications needs to be achieving good expansion at a reasonable temperature. Costs. Not just energy costs but possibly the equipment used as well - if it needs to withstand high heat then it needs to be expensive equipment. Likewise this temperature variant could interfere with what you are interlacing with the graphite.
I guess I'm getting quite technical in my search for applications that suit different graphite concentrate properties/qualities.

It seems quite logical to me that should any new/up ramped future Graphite output worldwide have/show a larger percentage of larger flake sizes in comparison to today's market, then the increase in availability of these larger flake sizes would likely create lower potential average sale prices for such flake size.

With reference to natural derived Spherical graphite, I'd feel one of the safer ways for a new supplier to look to enter the market would be to get into the current feedstock supply stream in China such as a supply to BTR for example. Yet I do feel that should this wave of growth eventuate, then some westernised input really will need to step up to the mark and start competitive processing.

Do you see Hitachi announcing an intention to build a new large plant in the U.S and potentially supply Tesla as the obvious choice because of their existing connections with Panasonic?

Cheers

Paul.