#2 Global Li-Ion Graphite Corporation (CSE: LION; OTC: GBBGF)
This could be the first company to bring us graphite ‘made in America’.
The enormous volume of lithium-ion batteries required to the changeover from fossil fuel power to electric power requires more graphite than it does lithium or cobalt, and demand for graphite is set to increase 200 percent in less than three years. By 2025, we’ll be looking at a 300 percent increase in demand. The scary part is that the U.S.—the largest consumer of graphite—doesn’t mine any. But it may soon, and that’s exactly why we’re looking at LION.
Global Li-Ion now has an option on one of the only past producing graphite mines in the United States. Even better, it’s located only 50 miles from Tesla’s Nevada gigafactory.
There’s nothing better for a graphite miner right now than to be in Tesla’s backyard. And there’s nothing better than being the only company sitting on what could become, if exploration and development work turn out to be successful, the only working tech-grade graphite mine in the country.
LION’s Chedic Graphite Mine in Nevada is a past-producing mine with the potential to contain a very large amount of graphite mineralization.
Drill hole locations are already planned, and geophysical surveys have already been completed. Optimism is running high because they’re now waiting on drilling permits, and Nevada is a mining-friendly state that’s been key to harness the energy revolution.
And it’s not just Tesla that LION is targeting as a potential customer. The bigger picture also includes voracious Chinese demand.
China’s crackdown on polluting industrial plants has taken 30 percent of its graphite electrode production capacity offline. That’s 300,000 tonnes of graphite capacity shuttered, leading to recent soaring prices for the metal. China has suddenly become an importer of graphite.
That means that graphite prices have been soaring. This year alone, shortages in China have driven prices to $16,330 per tonne. That’s a ninefold increase. On a global level, spot prices for graphite electrodes have jumped even more—hitting up to $35,000 per tonne as Chinese exports dried up.
In India, shares of graphite electrode manufacturers have doubled in the past three months thanks to a massive 300 percent jump in global electrode prices, and the momentum should remain steady driven by a sudden surge in electrode demand.
Global Li-Ion is also targeting the hungry Chinese and Indian markets, which it could access from its other graphite development in resource-rich Madagascar.
The company has an MOU to purchase the past-producing Ambato-Arana Mines in Madagascar, which is already permitted, with infrastructure in place, and, if the project proceeds as planned, production can go online in the near term. And it’s ideally situated to supply the massive demand for graphite coming from both China and India.
The Madagascar licenses total 4,375 hectares, and they are right next to a main highway, and only 200 kilometers from Madagascar’s main seaport of Toamasina. They’re also only 20 kilometers southwest of Sheritt’s Ambatovy nickel and cobalt mine.
But graphite is only the intro to this story. Graphite might be the next big wave, but the biggest potential opportunity that comes after it is graphene. Graphene is the real game-changer: It is project to be used in everything from artificial hearts and retinas to flexible electronic devices, EVs and even aircraft parts.
Considering tight supply, zero graphite mining in the U.S. and increasing demand, other companies in the graphite space have done well.
