Heilongjiang province focuses efforts on graphite processing

By Albert Li
Published: Monday, 03 April 2017

New mines must have processing capabilities; Economic hopes pinned on graphite; Processing stockpiled graphite not discussed

Heilongjiang province is enlisting graphite as the new pillar industry of the local economy and pushing for the sector to develop swiftly, local authorities said in late February.

The announcement came during a meeting for the provincial graphite industry in Harbin on 22 February. 

Heilongjiang vice-governor Haitao Li emphasised a number of end applications that will be developed as focuses for industrial graphite, including energy, agriculture, winter protection clothes and heat supply.

He also highlighted eight separate graphite industrial production processes, such as energy storing and sealing material, graphene material, conductive and refractory material, anti-corrosion and anti-radiation material, and purification and sieving material, among others.

Of the Heilongjiang Provincial Bureau of Land and Resource’s exploration plan for 2016, nine out of 17 graphite projects have made progress, adding over 500m tonnes graphite resources. Eleven exploration rights were sold via auctions.

In 2017, the bureau plans to continue looking for mines with the help of local funding, and aims to sell other exploration rights through auctions to draw investments. Further processing capabilities will be the most important condition that will be considered for graphite resource allocation. 

A unified project of both graphite mining and further processing will be auctioned, and preference will be given to companies looking into new energy vehicles and new materials.

However, the topic of potential oversupply of further processing products was not mentioned by the authorities gathered in Harbin.

Although for the moment the EV industry is booming, capacity expansion of source materials such as anode material for batteries may lead to overcapacity issues, which has happened in other industries already, one graphite miner told IM.

Heilongjiang Province has two graphite mining areas and is one of the three main producing provinces in China. At the same time, provincial GDP growth has ranked among the lowest in China for the past three years and the 2016 GDP target was not met. The provincial government is pinning its hopes on graphite to kick-start an economic revival, but the result will take years to come through.

Heilongjiang a key exporter in January

Graphite flake exports from China surged by 69% month-on-month (m-o-m) in January 2017 to 15,542 tonnes.
The provinces of Shandong and Heilongjiang accounted for 95% of the volumes exported from China in the first month of 2017.

Quantities exported out of Shandong surged 36% m-o-m while volumes out of Heilongjiang jumped a massive 118% m-o-m. 

Average January export values were at $678.12 for graphite from Shandong (down 15.12% m-o-m) and $479.68/tonne for graphite from Heilongjiang (down 7.62%), according to the customs data.

The value of graphite from Shandong product is usually higher than graphite out of Helongjiang given Shandong has been producing graphite for longer - as far back as the 1940s - and the province’s ability to process material further than producers in Heilongjiang.