Not of suitable quality for use in most applications
High Crystalline Graphite (vein, lump or crystalline vein)
Only extracted from Sri Lanka
Carbon content of 90-99%
Scarcity and high cost restricts viability for most applications
*Synthetic graphite is a manufactured product made by high-temperature treatment of amorphous carbon materials. In the United States, the primary feedstock used for making synthetic graphite is calcined petroleum coke and coal tar pitch. This makes it very expensive to produce — up to 10 times the cost of natural graphite – and less appealing for use in most applications.
Pricing
Graphite prices are a function of 2 factors – flake size and purity – with large flake (+80 mesh), high Carbon (+94%) varieties commanding premium pricing.
Column 1
Column 2
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Type of Natural Graphite
Average Price ($/tonne
1
Small Flake (95% – 98%
$900 – $1,200
2
Medium Flake (95% – 98%)
$1,050 – $1,400
3
Large Flake (95% – 98%)
$1,400 – $1,800
4
Jumbo Flake (95% – 98%)
>$1,600
5
Battery Grade Flake (99.9%)
$5,000 – $20,000
There is a posted price for Graphite which provides a guideline with respect to longer term trends but transactions are largely based on direct negotiations between the buyer and seller. Prices exceeded USD$1,300/t in the late 80s but crashed to USD$600 -$750/t in the 90s as Chinese producers dumped product on the market. During this period there was essentially no exploration and as a result there are very few projects under development.
Graphite prices started to recover in 2005 and with average growt rates of 5% per annum over the past decade. They are currently well over USD$1,300/t with premium product rumoured to be selling at up to USD$3,000/t as the supply of large flake, high carbon graphite is tightening. Price appreciation is largely a function of the commodity super cycle and the industrialization of emerging economies as new, high growth applications such as Li-ion batteries are only beginning to have an impact on demand and consumption. Graphite prices have not yet experienced the price appreciation of other commodities and graphite must still be considered an overlooked and undervalued commodity in the context of the current super cycle.
Future Growth
New applications such as lithium-ion batteries, fuel cells and nuclear power have the potential to create significant, incremental demand growth in the future. For example, it takes 20 to 30 times more graphite than lithium to make lithium-ion batteries. The use of lithium-ion batteries is growing rapidly in consumer electronics, and they are now becoming popular in power tools and motor scooters, and growth will continue with the increased use of hybrid and fully electric vehicles. Each hybrid electric car uses about 22 pounds of graphite, while a fully electric auto uses about 110 pounds.
Graphite is a Critical Strategic Mineral
The term “strategic minerals” generally refers to mineral ore and derivative products that come largely or entirely from foreign sources that are difficult to replace and that are important to a nation’s economy – in particular to its defense industry. Usually, the term implies a nation’s perception of vulnerability to supply disruptions and of a need to safeguard its industries from the repercussions of a loss of supplies.
Because Graphite is used in many energy related applications (including electric vehicles, Pebble Bed Nuclear Reactors, fuel cells, solar panels and electronics ranging from smartphones to laptops) it has been categorized as a critical, strategic mineral by several governments including the United States and Europe.
The availability of these critical minerals and mineral materials are essential for economic growth, national security, technological innovation, and the manufacturing and agricultural supply chain.
Supply Squeeze
Emerging markets such as India and China (now with a 20% export duty) have been holding back supplies of graphite for domestic consumption where the pace of industrialization has greatly outpaced the global averages. China controls about 74% of the world’s graphite production, although recently some of that production has been curtailed. In addition to shutting down older and smaller mines on the grounds of environmental violations, China is also seeing a tightening of labor conditions. The country is also consuming more graphite themselves, withdrawing somewhat from the international market to export the finished products. These factors, coupled with the complete nonexistence of graphite producers in the United States and Canada’s only existing producer’s supply nearly exhausted, a supply squeeze for all flake sizes is expected in coming years.
Graphite: A key role to play in green technology economy
In today’s world, graphite is considered a key, strategic material in the emerging green technology economy (also known as the Carbon Age) that includes advances in energy storage, electric vehicles, photovoltaics and electronics from smartphones to laptops. Graphite is also the source of graphene.
Strategic material in the emerging green technology economy (also known as the Carbon Age) that includes advances in energy storage, electric vehicles, photovoltaics and electronics from smartphones to laptops. Graphite is also the source of graphene.
As the green technology economy grows, demand for graphite is expected to outstrip supply over the next decade. For just one market – electric vehicles – estimated demand by 2020 would require more than is produced globally today (China is by far the world’s No. 1 graphite producer). For example, there is up to 10 times more graphite in a li-ion battery than lithium. Four key factors for economic graphite deposits:
In today’s world, graphite is considered a key,
Flake size
Grade
Purity
Purification costs
Flake graphite is a naturally occurring form of graphite that is typically found as discrete flakes ranging in size from small, medium to large mesh. Large flake size is generally needed for high purity, technology grade graphite.
Focus Graphite’s Lac Knife graphite deposit has a good distribution of large flake graphite at an average grade of approximately 15 per cent (NI 43-101 compliant). Lac Knife is one of the highest-grade large flake, natural graphite deposits in the world.
When Focus commissioned a pilot plant to produce high-grade graphite concentrates from Lac Knife mineralized material to determine the total carbon grade, flotation plant test results yielded large flake graphite concentrate (+80 mesh) grading 98.3 per cent (Source: Pilot plant test results, SGS Canada, 2013).
A highly concentrated grade translates to a graphite material with very few impurities. The fewer the impurities, the lower the purification costs to attain battery-grade end product.
For example, the costs of purifying a 95 per cent grade graphite to a minimum battery grade of 99.95 per cent is approximately $3,000 to $5,000 per tonne. The cost of purifying Lac Knife’s 98.3 per cent grade to battery grade quality is estimated to be between $500 and $1,000 per tonne. Graphite sources
It is estimated that the world reserves of graphite exceed 800 million tonnes. China is the most significant graphite-producing nation, providing more than 70 per cent of world production, and nearly one-half of the United States’ annual graphite demand (the U.S. produces no graphite). Flake graphite has also traditionally been imported to the U.S. from Brazil, Canada and Madagascar. Lump graphite is imported from Sri Lanka.
With demand for large flake graphite growing, it is projected that 25 new graphite mines will be needed worldwide by 2020. With China cutting back on production, no graphite producers in the United States and Canada’s existing small graphite industry in a holding pattern, a supply squeeze for all flake sizes is expected over the next decade. Looking ahead
Because graphite flakes slip over one another, giving it its greasy feel, graphite has long been used as a lubricant in applications where wet lubricants, such as oil, can not be used. Technological changes are reducing the need for this application.
Natural graphite is used mostly in what are called refractory applications. Refractory applications are those that involve extremely high heat and therefore demand materials that will not melt or disintegrate under such extreme conditions. One example of this use is in the crucibles used in the steel industry. Such refractory applications account for the majority of the usage of graphite.
It is also used to make brake linings, lubricants, and molds in foundries. A variety of other industrial uses account for the remaining graphite consumed each year.
Feeding the demand in future will be technology grade graphite needed for the burgeoning green technology economy. The lithium battery industry alone is projected to grow between 30 per cent and 40 per cent, with 20 per cent annual growth in the electric vehicle market (as much as 30 kilograms of graphite can be found in some electric cars).
With demand for large flake graphite growing, it is projected that 25 new 40,000 tonnes per year graphite mines will be needed worldwide by 2020.
Lac Knife, with its mine-to-market strategy, plans to lead the industry into the new Carbon Age.http://www.focusgraphite.com/technology/
HXG Price at posting:
9.4¢ Sentiment: None Disclosure: Held
(20min delay)
