Indian flake supply down 11%

Indian flake graphite output down 11% in 2014 By SHRUTI SALWAN: 8 December 2014
Supreme Court rulings on mining and environmental regulations saw India’s flake graphite output fall 11%
India’s production of flake graphite has fallen below 24,000 tonnes in 2014 due to the introduction of mining regulations by the new government, aimed at reducing illegal mining and improving safety standards. The country’s domestic output has dropped from 27,000 tonnes in 2013, with imports from areas such as China and Madagascar increasing as a result. Mining operations have been affected in all three of the major graphite producing states; Jharkhand, Odisha and Tamil Nadu. IM Data sources revealed that restrictions in these areas have led to the closure of some operations where mining licenses had expired. Furthermore, the more stringent application process for license renewals has left certain mines un-operational while they await further clearance. Today, India’s flake graphite imports are around 30,000 tpa, which accounts for more than half of the country’s domestic consumption. Domestic consumption While domestic output has fallen, India’s flake graphite consumption has increased over 2014, especially in the refractory, foundry and crucibles markets. India consumed over 45,000 tonnes of flake graphite in 2013, making the country the third largest consumer in the market behind China and Brazil. With domestic producers failing to meet the growing needs of Indian consumers, imports have gone up by nearly 66% in last two years, from 18,000 tonnes imported in 2011 to 40,000 tonnes this year. The trend is likely to continue in the coming years as the country attempts to increase crude steel output to 120-135m tonnes by 2025. With India’s new government aiming to improve mining industry standards, the longer-term efficiency of India’s graphite production is expected to increase, with established flake graphite producers investing to meet new industry standards. In the short-term, however, output is expected to keep falling with a backlog in mining licence renewal applications and many companies awaiting environmental clearance before they can restart operations. As a result, the country’s flake graphite trade deficit will increase throughout 2015 as output continues to fall and domestic demand increases.