By Simon Moores and Andy Miller, Industrial Minerals Data
The future for
electric vehicle (EV) batteries led discussion at
Industrial Minerals 2nd
Graphite Conference in London last week, despite being only
the fourth largest market for the industry.
Graphites use as the anode material of choice in
lithium-ion batteries has gained it critical mineral status
which has buoyed the sector over the last 18 months.
| Natural graphite end-markets in 2012
(Source: IM Data)
By volume graphite is the largest raw material
used in lithium-ion batteries a single EV contains
between 28kg and 38kg of graphite.
The question still remains how much graphite will
be needed if EVs take off. The battery sector serving EV
manufacturers has the potential to grow at 20% a year, but by
volume is still far off the leading consuming market
Refractories high temperature linings and
bricks consumed primarily in steel manufacturing
consumed 39% of natural graphite production in 2012 with
batteries accounting for just 9%.
Despite this, discussions centred on EV battery
potential and the technology to process the raw material into a
product suitable for the sector, namely
China holds the bulk of spherical graphite
processing technology at present, something which is of concern
to western manufacturers. China also produced 79% of natural
graphite output in 2012, an even more immediate concern to the
industry eager to avoid a rare earths-style dependency.
These are some of the factors that have sparked
into exploration activity over the last 18 months, especially
in Canada, which has been the epicentre of the worlds
search for new graphite projects.
These newer entrants were understandably more
bullish on future demand than existing producers at the
Graphite has recently gone through the process
lithium and rare earths experienced a few years ago: a boom in
prices and exploration, followed by a
market slowdown leaving juniors finding it increasingly
difficult to justify their projects.
The furore which engulfed the industry in 2011
has calmed significantly in 2012 as access to investment became
a challenge for many publicly traded junior companies in North
But according to some market observers, 2013 is
expected to see an upturn.
2013 rebound after poor year
2012 has been a poor year for graphite demand.
Trading activity has drained out of the industry since
September with little sign of return until the New
The conference heard that Chinese production is
predicted to have fallen by around 4% in 2012, primarily due to
slowing construction markets around the world and a reduction
in the need for steel and refractories.
China is also pushing to regulate its dated and
fragmented graphite industry with a blanket ban on new graphite
processing plants in Shandong, a major producing
The Chinese government is eager to limit lower
value exports in favour of higher value products. At present it
ships raw material to Japan or South Korea to be made into
battery anodes and batteries which it buys back and a premium
This situation strengthens the argument for new
mines outside of China and supply diversity is high on the
agenda for the graphite industry.
These factors, alongside an anticipated rise in
demand, have encouraged market entry. However, Stephen Riddle,
CEO of Asbury Carbons, has urged the industry to learn from the
mistakes of the past and avoid
flooding the market with supply.
This was seen in the early 1990s, when a string
of new graphite mines went into production before promptly
going out of business owing to the emergence of low
cost Chinese production and shortfalls in anticipated
This caused production to nearly halve between
1990 and 1995, and by the early 2000s all but one of five new
mines went bankrupt.
The Natural Graphite Report 2012, Industrial Minerals
Industrial Minerals Data (
Industrial Minerals Data is a new service
providing detailed prices and analysis the graphite and
fluorspar industries launching January 2012.
Simon Moores, Manager, Industrial Minerals Data
Andy Miller, Junior Analyst, Industrial Minerals
The Natural Graphite Report
Launched in October 2012, The Natural Graphite
Report is an extensive market study focusing solely on natural
flake, vein and amorphous graphite supply, demand and
Data, analysis and forecast for the next five
New, original data from Industrial
Unique country supply reviews including: China,
Brazil, India, North Korea, and Canada
Major demand drivers Li-ion batteries,
refractories, & emerging markets
How will prices react? Historical analysis and
Demand destruction risks
Critique of the graphene revolution
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