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GRAPHITE ’14: Fighting the good graphite

By Laura Syrett
Published: Friday, 12 December 2014

As 2014 draws to a close, the global graphite industry took advantage of IM’s 4th annual Graphite and Graphene Conference in Berlin to reflect on what has been another tough year for the industry as well as to outline its achievements, which include two new mine openings and a fresh boost of confidence in future demand from the batteries sector.

Belief in sustainable, long term growth in the worldwide graphite industry appeared untainted at the 4th IM Graphite and Graphene Conference in Berlin this week, even as doubts continue to hang over whether a positive market inflection can come soon enough to save the bulk of the sector’s juniors.

Chinese flake graphite
There is more than enough natural and synthetic graphite being produced to meet current demand, but industry insiders say that new non-Chinese sources are still desirable, particularly if demand from the batteries sector takes off as anticipated.

 

“We’ve some companies drop out and new ones come in,” one delegate from a leading industrial minerals group, who preferred not to be named, told IM.

“One of the great things about this industry is its agility and ability to pick things up and run with them,” he said, remarking on the optimism that pervaded this year’s meeting.

The aptitude of the graphite industry to successfully diversify its appeal and application as a critical mineral for the future was reflected in the range of topics discussed in Berlin, which ranged from traditional refractories and electrodes to batteries, nuclear graphite and, of course, graphene.

Notwithstanding the array of potential growth opportunities, both the natural and synthetic graphite industries have suffered over the last three years from the global downturn in steel manufacturing, coupled with the slower than anticipated emergence of demand growth from the battery industry.

Lithium-ion and other graphite-containing chemistries are credited with being a go-to source for next generation, green and reliable energy, but as Stephen Riddle, CEO of US-based Asbury Graphite Mills told delegates, this demand is “not here yet”.

“Growth will come from the battery market,” Riddle said. “This will be from batteries used in electric vehicles (EVs) and energy storage – not cell phones or IPads. These don’t use enough graphite,” he added.

Riddle warned juniors and investors against overstating the smoothness path from mine to market and eventual profit for graphite projects. “There are a lot of hurdles to overcome to be profitable,” he added.

High value processing

Fabrizio Corti, senior vice president for sales and business development at Switzerland headquartered Imerys Graphite and Carbon, said that, for reasons of purity and physical structure, much of the world’s natural graphite is unsuitable for the high value markets many juniors are aiming at.

“Only a very small proportion of the graphite we have today is suitable for high end markets and even this requires heavy processing,” he said.

He explained that choosing the right production process for graphite is key to accessing high end markets. “Just being a carbon precursor producer is not enough for these markets,” he said, adding that there is likely to be competition between natural and synthetic graphite material when it comes to securing a share of the battery market.

From a sustainability viewpoint, Corti said that natural graphite producers currently throw away around 60% of their volume in the process of producing battery grade material and questioned whether the EV industry would continue to tolerate this waste ratio as its supply chains come under increasing scrutiny.

“Of course, high purity synthetic graphite is more expensive,” he conceded, but said that on an “apples with apples” comparison, natural and synthetic graphite of similar grade are roughly level pegging on costs.

With around 40% of this year’s conference delegates originating from the junior mining sector, with projects at various stages of exploration in countries including Canada, Sri Lanka, Inner Mongolia, Madagascar and Tanzania, there was acknowledged to be considerable scope for new, innovative processing designs that extract the most value from different geological occurrences of graphite.

According to Reiner Haus, managing director of process design experts Dornfer Anzaplan in Germany, mining companies need to tailor their processing techniques to get the best out of their individual mineral ores.

“The main challenge miners face is that you can’t change the distribution of flake size in your deposit,” Haus said.

He explained that “standard processing” techniques based on grinding and flotation, as applied to flake graphite ores today, destroy a significant proportion of the large flakes. “This creates a lot of wastage, just to produce a few large flakes.”

Haus said that processing needs to follow and keep the benefits of a given ore and encouraged junior graphite developers to investigate new techniques when selecting a process for their projects. “Think outside the box – look at what else is available before you decide,” he said.

Non-Chinese supply still desirable

Despite the present oversupply situation, flat pricing and subdued near term demand projections for natural and synthetic graphite, Gerry Hand, vice president for marketing at US-based Superior Graphite, said that downstream consumers of graphite are still looking for supply from outside China.

“Non-Chinese supply is still desirable for risk mitigation purposes,” he said, noting that there is a shift underway towards more value-added graphite production in China, reducing the amount of raw material available for buyers in the rest of the world.

He echoed a point made by Klaus Rathberger, managing director at Germany’s Georg Luh Gmbh, that most of the world’s spherical graphite – the type of material used in batteries – is made in China and that any new entrants to the market will need to match or undercut China on cost in order to get a foothold in the market.

Morgan Advanced Materials’ global technology director, Andy Goshe, also suggested that China is making significant headway with graphene science, while John Hykawy, president of Canadian analytical services firm, Stormcrow Capital, said that developments in the nuclear industry, already underway in China, could provide an opening for suppliers of extremely high purity natural graphite.

He discussed the shift towards ‘generation four’ graphite moderated pebble bed nuclear reactors, which currently rely on synthetic graphite to get the purity and consistency of material needed to manufacture the graphite ‘pebbles’.

He said that plans to build 70 GWe of nuclear power in China by 2030 could require 340,000 tonnes of graphite in the initial build – some of which could be supplied by the mining industry, although to date only the Canadian juniors Zenyatta Ventures and Canada Carbon have published results suggesting that they can achieve the required purity.

New mines

Of the numerous regions that are emerging as increasingly significant non-Chinese sources of graphite, Madagascar, Sri Lanka and Sweden have garnered some of the most intense interest over the last 12 months.

All three countries have graphite mining industries that date back over a century and Sweden and Madagascar both saw past-producing mines successfully reopened earlier this year by TSX-listed Flinders Resources and London-based StratMin Global Resources, respectively.

Craig Scherba, chief operating officer of Toronto-headquartered Energizer Resources, which is developing the Molo large flake graphite project in south-central Madagascar, said that the successful startup of new graphite mining operations, albeit from old projects, was a positive sign for the industry.

“I think it is great that other companies are coming into production in Madagascar. Each additional company that comes online proves that the country is a good jurisdiction to work in,” he said.

Blair Way, CEO of Flinders, which has an offtake agreement set up with Germany’s ThyssenKrupp Metallurgical Products GmbH, said that although bringing a project into production was acknowledged to be a significant achievement in the current market, this was not the end of the challenge.

“It takes time for this kind of achievement to be reflected in market valuation,” he said, but stressed that the company is on a strong growth path with a solid position in Europe’s graphite-consuming market.

For more on this year’s IM Graphite and Graphene Conference, click on the links below:

GRAPHITE ’14: Imerys Graphite and Carbon reinforces commitment to Lac des Iles mine

GRAPHITE ’14: Graphite prices expected to remain broadly stable in 2015

GRAPHITE ’14: Tirupati Carbon to open 12,000 tpa flake graphite mine in Madagascar within the next year

GRAPHITE ’14: No graphene fits all