Mining Graphite

Pic: Getty Images

Graphite has a huge role to play in the renewables future… but why hasn’t the market realised it yet?

Mining

3 hours ago | Jessica Cummins

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• Experts say there’s a chance graphite could become a better play than lithium, so why hasn’t the market caught on yet?
• Maybe ‘cos 99% of battery graphite production is concentrated in China….
• But some say graphite is the next battery mineral to take off

Most people are familiar with graphite because of its use in the humble pencil or in refractory (‘heat resistant’) bricks, but the critical mineral has a far greater and much more important role to play as we shift towards a low-carbon economy.

Graphite flies under the radar when discussing lithium-ion batteries but an EV battery contains around 50kg of the stuff, around 10 times the amount of lithium required, so it’s playing a huge part in decarbonisation by way of energy mobility through batteries.

It is the -100-mesh product (also known as natural graphite concentrate), used in the production of spherical graphite for anodes in lithium-ion batteries that has analysts predicting the graphite market will enter a period of unprecedented growth.

Benchmark reckons a structural deficit is looming as global demand begins to outstrip supply, Credit Suisse says there’s a chance graphite could become a better play than lithium, and the World Bank forecasts low-carbon energy technologies will require 4.5Mt of graphite per year by 2050.

“That’s a 500% increase over 2018 levels and around a 318% increase over the total graphite produced in 2019,” Peak Asset Management’s Conor Daley said.

But unlike lithium, where prices get all hot and frothy surging as much as 400% in the past year to record levels, graphite prices in comparison are somewhat mediocre – up by 22%… but still up.

Graphite hasn’t captured the mainstream attention of investors globally yet and we asked Talga Resources’ (ASX:TLG) managing director Mark Thompson why.

Buckle up and prepare for graphite’s take-off

“Graphite has been flying under the radar because lithium, copper, and cobalt are old, well understood metals that are publicly traded and visible,” he said.

“Around 99% of battery graphite production is concentrated in China and the rest of the world hasn’t really known much about it, hasn’t had to think about it but they are beginning to now.

“It isn’t publicly traded – it’s a non-metal so I think people find it a little harder to understand but because it is 50% of all the batteries and because products you make from graphite like graphene can change the world for the better, it is growing in popularity, and I would say the time for graphite is now.”

Graphite has another critical role to play as the source for making graphene, which is an ultra-thin, super strong, lightweight material that when added to things such as paint coatings, concrete, plastic, fibre glass, wind turbines or solar panels makes them stronger, lighter, and faster.

Researchers have discovered that adding even a trace amount of graphene – about 1 or 2% – into materials can make a massive difference.

It is therefore believed to hold the potential in revolutionising entire industries such as electricity, conductivity, energy generation, and batteries.

“What we are seeing now is demand for batteries is only just starting to hit graphite,” Thompson said.

“It is not being speculated on, it’s just simple business demand.

“Graphite is the next battery mineral to take off.”