Increased Demand should boost Graphite hite Miners

Increased Demand Should Boost Graphite Miners
Feb. 4, 2015 4:32 PM ET | by Ryan Edward

Summary

Electric Vehicles should create long-term growth drivers for a number of materials used in lithium-ion battery production.

The Department of Energy estimates that graphite constitutes approximately 16% by weight of a typical lithium-ion battery.

There is a potential significant imbalance between current levels of supply and the projected future demand for graphite.

At present, there are 20 graphite projects being developed by 16 different companies in 8 countries.

While most of these companies are still early stage, a basket of operators in lower risk regions (USA/Canada) may be a logical starting point.

Improvements in the fuel economy of vehicles used in transportation is a fairly recent occurrence. In fact, the average fuel economy of a U.S. vehicle barely budged over the near 90-year period between 1920 and 2006. Overall fleet fuel efficiency actually decreased from 14 mpg in 1923 to a low of 11.9 mpg in 1973, but then rapidly increased to 16.9 mpg by 1991. From 1991 to 2006, fuel efficiency increased by less than 2%. Almost all of the gains in recent years stemmed from government fuel economy mandates, making this shift a fairly recent phenomenon. Current rules require automakers to nearly double the average fuel economy of new cars and trucks (to an average ~55mpg) by 2025.

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