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What management thinks about...
Prices for large flake graphite increased from about $700 per tonne in 2005 to approximately $2,800 in 2012 due to the growth in China and other emerging economies. They have since declined to about $1,000 due to the slow down in China and its steel industry, a lack of growth in the US, Europe and Japan, and a strengthening US dollar. Further price declines are unlikely as many uneconomic mines have closed and a number of Chinese mines have been shut down for environmental reasons. Demand from lithium ion batteries is growing at over 20% per year and has already caused a significant rise in lithium prices. It now accounts for about a third of the graphite market and we are getting close to the point where batteries and not steel, will drive graphite prices.
China produces over 70% of the world’s graphite. Its industry is very fragmented with many labor and environmental issues and mines that are getting older, deeper and higher cost. China is modernizing and consolidating much of its mining industry to provide for more professional management of its resources. Recently, over 30% of Chinese flake graphite production was shut down, either because it was uneconomic or for environmental reasons. Also, China wants to export value added products, not raw materials, and therefore it has export taxes and an export licensing system and resource nationalism is an increasing concern. For these reasons, Chinese graphite production and exports are likely to decline in the future and stable, secure sources of high quality supply in the west are needed. Recently China announced that it is going to build a flake graphite stockpile equal to 80% of annual production by 2020.
Graphene is one of the top research topics in the world with billions of dollars of funding committed. At present there is no process for making commercial quantities of graphene and there are no commercial products based on graphene. Dozens if not hundreds of organizations are working on these challenges and once solved, the results could revolutionize the way we work and live. Natural graphite is one source of graphene and will probably supply the lower technology applications such as conductive inks and coatings and composite materials. There are up to three million layers of graphene in a one millimeter thickness of graphite so a little goes a long way.How graphene might change the world
EVs are not going to replace the internal combustion engine. However, there are many uses and markets where they make sense including short range commuting, city driving, taxis and delivery vehicles. EVs only need to become modestly successful to have a big effect on the graphite market. If one per cent of the new car market (about 700,000 cars) were EVs, world flake graphite production would have to increase by about 30% and multiple new mines would be required. The proposed Tesla “gigafactory” requires up to six new mines. China alone plans on having five million EVs by 2020.
Expandable graphite is one of the fastest growing markets along with Li ion batteries. It involves treating XL flake graphite with a dilute acid solution and heating it to cause the flakes to split apart and increase hundreds of time in volume. This material is pressed into sheets which can be cut into shapes and used in many applications including thermal management in consumer electronics, advanced building materials, heat and corrosion resistant gaskets, fuel cells and flow batteries. Fuel cells are already a billion dollar industry with commercial buses, forklift trucks, standby power plants, etc. already in operation. There are commercial fuel cell cars now and many observers expect them to become more popular more quickly than EVs.