Ann: Uley 3 Drill Program results in Mineral Resource Estimate, page-10

Editor OilPrice.com

Wed, December 22, 2021, 9:01 AM·19 min read

In this article:

• 
  

  
  
• 
  

  
  
• 
  

  
  
• 
  

  
  

• TSLA

  +4.29%

  
  

LAC

+6.21%

TECK

+3.52%

GM

+1.39%

The key to the momentous global energy transition is what Goldman Sachs calls the “great battery race”, and while attention has been absorbed by lithium, one critical mineral in the battery mix is possibly the most lucrative back door entrance into this race.

The mineral is graphite, and it is the key element that forms the anode of the lithium batteries.

Without it, there will be no energy revolution and the trillion-dollar EV market might not exist.

In 2019, the global graphite market was valued at $14.9 billion. By 2027, it’s expected to be valued at nearly $22 billion. It might be worth much more than that, though.

Each EV battery contains 20-30% graphite, which means that graphite demand will soar in tandem with EV demand.

And at the same time, both China and the US are now struggling with a graphite squeeze.

While EV giants have been busy scrambling for lithium sources around the world, new concerns have arisen about a lack of graphite supply.

Some 90% of graphite anodes used in batteries come from China.

It’s yet another critical battery mineral that is becoming a national security issue for the United States, and it may be as revolutionary as plastic was in the 1950s:

With the supply squeeze on and EV demand skyrocketing as the leader in a global energy transition, we think it’s time to take a much closer look at one of the veteran processors of this mineral, Graphex Group Ltd (OTCQX: GRFXY, 6128.HK).

They’ve been around since 2008 and have developed methods for graphic processing since 2013. They’re veteran producers with major long-term contracts in China and working with some of the biggest household names.

Now, they’re looking to jump into the U.S. and European markets to help supply the growing battery manufacturing industry just beginning to be established, where new supplies of graphite are feeling the squeeze. Graphex’s President John DeMaio is making a push with the expansion of their USA-based team to focus on the North American and European expansion plans to be an integral part of the supply chain being created to support the western EV industrial complex currently being built.

Double-Digit Demand Growth

Graphex believes the graphene market will see double-digit growth for the next 5 years with an estimated 29% CAGR.

While the overall car market slumped during COVID, global EV sales grew an astonishing 41% in 2020 to about 3 million electric cars, and more growth is coming, says IHS Markit, spurred in part by major policy boosts across the globe.

IHS

Source: IHS

As of year-end 2020, China had 4.5 million EVs, and Europe 3.2 million.

EV

“Rates of EV sales will rise sharply”, says IHS Markit, which defines the “tipping point” as 2027. That’s when they will reach manufacturing cost parity with internal combustion engine (ICE) vehicles in China. After that, it could be a snowball, with price parity hitting the EU next.

The best news: Of the 89 million vehicles IHS Markit expects to be sold in 2030, it predicts 23.5 million will be electric.

That means a soaring market for graphite. Graphite serves as the anode in lithium-ion batteries and is also used in electronics and portable tools.