IM 2012 Round-ups: Graphite

By Laura Syrett
Published: Friday, 21 December 2012

The graphite industry entered 2012 on a positive note Wwith prices still high and both miners and carbon mterials producers riding high on the surge of interest in 2011.

The graphite industry entered 2012 on a positive note with prices still high and both miners and carbon materials producers riding high on the surge of interest in 2011.

Exports of natural graphite from China decreased 30.7% year-on-year in February to 18,686 tonnes, according to data released by Chinese Customs, representing the fifth consecutive monthly decrease in export volumes, making them lower than any period in 2010 and 2011.

The total export value reached $20m, a 71.6% increase on the corresponding period in 2011, reflecting the mineral’s price peak in the first part of 2012.

Germany’s Graphit KropfmŸhl AG (GK) revealed in May that it was to restart its KropfmŸhl mine in southeast Germany and that all of the targeted 5,000 tpa graphite produced would be used internally.

Following a quiet June, July saw the re-emergence of one of Canada’s most notable natural graphite deposits: the Lac GuŽret property in south-east Quebec became part of newly formed Mason Graphite Inc, having previously belonged to US iron ore miner, Cliffs Natural Resources Inc.

Mason Graphite paid Canadian dollar C$15m ($14.8m) for Lac GuŽret, which has a measured and indicated resource of 7.59m tonnes grading 20.4% C and an inferred resource of 2.75m tonnes grading 17.29% C.

In September, Brazilian refractories manufacturer Magnesita Refratarios SA obtained a licence to build a new graphite plant in the state of Minas Gerais, south-eastern Brazil.

The plant is expected to produce up to 40,000 tpa graphite from the Almenara graphite mine, although a target production date was not revealed.

At the end of October, the Municipal Environmental Protection Bureau for Qingdao issued a formal notice preventing the approval of any additional graphite processing plants in the towns of Pingdu and Laixi, Shandong province, northeast China, as part of an environmental rectification programme.

The region is one of China’s largest flake graphite-producing areas and home to companies including Qingdao Haida Graphite Co. Ltd and Qingdao Xinghe Graphite Co. Ltd.

The order represented the first significant restriction on the flake graphite industry in China, and sparked speculation that further production controls could follow.

In November, Sri Lanka’s Board of Investment (BoI) signed a deal with Plumbago Lanka (Pvt) Ltd in a venture that will see the firm invest $78m during four years to process and export graphite in Sri Lanka.

Sri Lanka’s Esna business advisory group will own a 25%- stake in the project, which was the second such deal in as many months. In October, the BoI approved a proposal by Sarcon Development (Pvt) Ltd, whose main investor is the Caribbean-based Plumbago Refining Corp., to set up a $15.2m graphite processing facility to produce material for export.

The charge of graphite juniors was largely dominated by Canadian companies in 2012, although by the end of the year only one miner - Northern Graphite Corp., which owns the large flake Bissett Creek graphite deposit in eastern Ontario, Canada - had completed a bankable feasibility study.

Carbon materials

2012 was a mixed year for downstream manufacturers of graphite materials.

Graphit KropfmŸhl AG (GK), started the year by posting profits of Û8.9m ($11.6m) for the full year 2011, up from €6.1m ($8m) earned in 2010, driven by high demand from the energy efficiency field.

The company’s interim report the first six months of 2012 was less positive, however, showing a 10.9%-drop in EBITDA for the graphite business segment.

Fellow German manufacturer, SGL Carbon, had a more consistent year, signing a five-year electrode supply deal with steel producer ArcelorMittal in April, and reporting strong growth in turnover due to Asian sales in September.

US-headquartered GrafTech International reported declining net profits from the second quarter of the year owing to lower sales and a fall in operating margins.

Despite a Q3 dip in profits of 25% to $30m, GrafTech CEO Craig Shular remained positive, saying that the company was targeting full-year EBITDA in the range of $235m to $245m, its fourth-best performance on record.

Electrode manufacturing giant Graphite India Ltd announced quarterly increases in net profits over 2011 figures throughout the year. The company attributed the increases to demand from domestic and international steel manufacturers.

Graphite 2012

The year was rounded off by the 2nd IM Graphite Conference in London in December (see pp. 8-9).

To avoid the cycle of unsustainable prices followed by a sharp drop in demand as consumers turned to other materials seen in the rare earths industry, graphite needs new low-cost, high- quality mines to compete with China, Stephen Riddle, Asbury Graphite Mills Inc. CEO, told delegates.

Yifei Zhang, UK representative of Inner Mongolia Rising Group, acknowledged China’s dominance in the global graphite supply scenario but denied that China was “powerful” within the industry since it presently has only low-profit products and an immature market with too much extra capacity.

Chinese graphite companies will look to develop high-value graphite products through advanced manufacturing techniques and patents, as well as industry consolidation and more effective use of resources, Zhang said.

Delegates were also given an insight into the potential of graphene, the industry’s much-discussed “wonder material”, which was discovered in 2004 by researchers at Manchester University in the UK.

The challenge faced for graphene is how to master its unique properties, Ian Kinloch, professor of materials science at Manchester University, told delegates.

Although graphene is not yet available on a bulk scale, this is changing, Kinloch said. By 2020, semi-conductors will represent its largest market, followed by conductive inks for a range of security applications, he forecast.

Dr Gordon Chiu, chief scientist at the Canadian graphene development company Grafoid Inc. led a call on the graphite mining industry to invest its efforts in bringing the new material to market.

“Without graphene, graphite will remain where it is now,” he said. “To achieve a tonne-scale level for graphene production will require the participation of a large section of the graphite community, as the system needs a lot of resources.”