Spotlight on VRC - Largest deposit in Tanzania, page-228

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Just did a quick Google search .... Hope this helps Winston Wolf.


Graphite overlooked

When downplaying the lithium supply issue, Tesla explained that the most important cost factors to a lithium ion battery included the cost of nickel and the graphite anode.

“The main determinants on the cost of the cell are the price of the nickel in the form that we need it… and the cost of the synthetic graphite with silicon oxide coating,” explained Musk.

Graphite has not experienced the price spikes that lithium is going through primarily because the price is driven by the materials’ consumption in steel, a globally depressed market.

As a result, graphite’s supply situation has fallen under the radar.

At present, Tesla uses Panasonic manufactured cells which use both synthetic graphite and natural spherical graphite for anode material, all of which is sourced from China.

For the Gigafactory, however, Tesla has had to source all raw materials itself and, in a bid to drive costs down and improve battery performance, Benchmark understands that Tesla favours the natural spherical product due to its lower cost profile and lower carbon footprint for manufacturing.

Today, 100% of natural spherical graphite is produced in China, and last year alone production expanded by nearly 50%. Increasing demand has seen prices of uncoated spherical graphite increase by 10% in the last two months.

While the country is increasing its spherical graphite capacity, there is a fear that there will not be enough quality product available for internal Chinese needs together with other emerging customers such as Tesla.

In many ways, however, Elon Musk was correct. Graphite’s importance to the cost of a lithium ion battery cannot be underestimated.

While the average cost of an anode is 30% of a battery, graphite is 50% of the anode cost equating to 15% of the cost of a cell.

Meanwhile, the average cost of the cathode is 40% with lithium being 50% of the cathode cost, equating to 20% of the cost of a cell (before the Q1 2016 price spike).

If you consider that there is more graphite in a lithium ion battery than lithium, the cost of graphite to a battery could be as, if not more, significant than lithium. It just has not been considered because the price of flake graphite feedstock is low and there is a synthetic substitute.

But considering the preference towards natural spherical graphite, and the fact that demand is outpacing new supply, it is a subject that could soon rise to the surface, and in many ways, that is thanks to Tesla putting it on the radar.