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Graphite and diamonds are the only two naturally formed polymers of carbon. Essentially, graphite is a two-dimensional planar crystal structure, whereas diamonds are three-dimensional. While graphite is as tough as diamonds, it’s also lighter, softer and very flexible.
Further, graphite is inert and highly heat-resistant, which, together with its great natural strength and stiffness, make it an excellent conductor of heat and electricity. Indeed, graphite retains its integrity at temperatures of up to (and sometimes exceeding) 3600 degrees Celsius. Graphite is also the lightest of all reinforcing agents, highly resistant to chemical attack and has excellent lubricating properties.
Graphite is essential to an enormous variety of energy-related applicationsso much so that it’s been categorised as a critical strategic mineral by several countries, including the United States and the European Union. Indeed, graphite has been identified as one of thirty critical raw materials exhibiting a gross shortfall in supply.
For both aspiring and established graphite producers, ‘blue sky’ is the incremental demand created by its use in a number of ‘green’ initiatives, among them lithium ion (‘Li-ion’) batteries, fuel cells, flow batteries and pebble-bed nuclear reactors. In fact, many such applications have the potential, individually, to consume more graphite that all its current uses combined.
Naturally occurring graphite comes in three distinct types – flake, amorphous and high-crystalline, each found in different kinds of ore deposits. Synthetic graphite also plays a significant role in the marketplace. Each type of graphite can be characterised as follows.
Synthetic graphite results from the high-temperature treatment of amorphous carbon materials. In the United States, the primary feedstock for synthetic graphite is calcined petroleum coke and coal tar pitch. This makes it very expensive to produce (up to 10 times more than natural graphite). As a result, synthetic graphite is used predominantly in specialty applications in which its superior consistency and purity (+99 per cent) over natural graphite justify the premium price.
Graphite has come a long way since the days of the humble ‘lead’ pencil. Today, its applications are multifarious and ongoing, particularly within certain industry groups.
Traditionally, demand for graphite (with its high fusion point) has been led by the steel industry, in applications such as the following.
Graphite is used as the anode in all major battery technologies. For that application, the flake size is less important than a high purity of 99.9 per cent.
Right now, the battery industry represents the largest potential market for graphite, particularly for use in the Li-ion batteries that power so many of today’s electronic devices and electric vehicles (‘EVs’) – from smart phones and tablets to all-electric autonomous container ships and Teslas, and so much in between.
Last year, Elon Musk averred that the Li-ion batteries Tesla produces should really be called Nickel-Graphite batteries, given that the amount of lithium they contain in comparison to the nickel and graphite components of the cathode and anode respectively is “like the salt on the salad.”
Today, the battery market accounts for 25 per cent of current graphite demand (much of it from China), a figure that’s growing at around 9 per cent per annum (see Supply section below).
Graphite foils – composed of 98 per cent graphite (mostly large and jumbo flake) – are excellent conductors of heat and electricity and their low thermal resistance makes them ideal for use in high-power applications requiring maximum heat transfer. This application presently represents the fastest growing market for flake graphite, accounting for 10 per cent of demand.
Historically, the automotive industry has used graphite in the brake linings of heavier vehicles, for gaskets and in clutch materials. Of course, with the advent of EVs of all types, shapes and sizes, graphite is integral too to the batteries that power them. Take the Tesla, arguably the world’s most high-profile EV: each requires around 36 kilograms of graphite.
Graphite is an important component of a number of other enormously exciting technologies, many still in research and development. They include the following.
Global graphite production from mines.
In 2016, the top ten natural graphite-producing countries were as follows. (Note: 1 MT equals 1,000 kilograms.)
In total, the graphite market averages around 2.5 MT a year globally, which includes the sum of natural and synthetic graphite production. Currently, at around 1 MT per year, demand for natural graphite – 60 per cent flake and 40 per cent amorphous – exceeds that for magnesium, molybdenum, cobalt, tungsten, lithium and rare earths combined.
Historical global graphite demand (000’s of tonnes) [Source: Benchmark Mineral Intelligence.]
However, the market for amorphous graphite is in decline, since only flake graphite that can be economically rounded and upgraded to 99.95 per cent purity is suitable for use in Li-ion batteries.
During the past decade, then, demand for flake graphite has been growing at about 5 per cent per annum, fuelled by rapid and ongoing industrial growth in China, India and other emerging economies, and the development of remarkable innovations that will transform the way we live in the 21st century.
The fundamental pillars of the graphite market are compelling. Besides its traditional uses, flake graphite is seen as having a disruptive advantage as a key ingredient in new technology applications for energy-storage products, as discussed above. Consider the following.
Tesla put graphite back in the spotlight in 2015 by announcing the production of its Powerwall for residential use, and by building its huge battery-cell facility in Nevada, which began production in 2017. Many others, too, have now joined or are joining the race to supply the burgeoning market for electric vehicles and energy storage.
Forecast of global graphite demand 2015-2015e (000’s of tonnes) [Source: Canaccord Genuity].
Recently, Peter Tertzakian, writing for OilPrice.com, had this to say about the price of key commodities, including graphite, and what lies ahead.
Lithium-ion batteries continue to fall in price and increase in utility. That’s why we’re scaling up from watch batteries to iPhones to electric vehicles to home storage units and beyond. But key battery ingredients are lithium, cobalt and graphite. Commodity prices are likely to rise. All energy systems trace their baggage back to natural resource extraction; just ask anyone in the fossil fuel business.