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The New Strategic Mineral

Graphite is one of only two naturally occurring forms of pure carbon, the other being diamonds. Graphite occurs in a two dimensional, planar molecular structure whereas diamonds have a three dimensional crystal structure. Graphite generally occurs as flakes, which are multiple layers of graphene held together by weak bonds.  Graphene is a single, one atom thick layer of carbon atoms arranged in a “honeycomb” or “chicken wire” pattern.  It has been estimated that there are three million layers of graphene in a one millimeter thickness of graphite.  The delamination or exfoliation of graphite flakes is therefore one method of making graphene.

Graphite is formed naturally through the metamorphism of carbon rich materials in rock which leads to the formation of either crystalline flake graphite, fine grained amorphous graphite, or crystalline vein or lump graphite. Graphite is a non-metal but has many properties of metals.  It is an excellent conductor of heat and electricity and has the highest natural strength and stiffness of any material. It maintains its strength and stability to temperatures in excess of 3,600°C and is very resistant to chemical attack. At the same time it is one of the lightest of all reinforcing agents and has high natural lubricity.

What is graphite used for?

Traditional demand for graphite is largely tied to the steel industry where it is used as a component in bricks which line blast furnaces (“refractories”), as a liner for ladles and crucibles, and as an agent to increase the carbon content of steel. In the automotive industry it is used in brake linings, gaskets and clutch materials. Graphite also has a myriad of other industrial uses in lubricants, carbon brushes for electric motors, fire retardants, and insulation and reinforcements products.  Graphite is a very important part of everyday life but is rarely seen or heard of.  As such it has been a somewhat boring industrial mineral whose price rises and falls according to the economic cycle and production levels in China, the dominant producer.

This all began to change around 2005 as demand for flake graphite was growing at approximately five per cent per year due to the growth of China and other emerging economies and the resultant increase in demand from the steel industry.  Prices rose from about US$700/t for large flake graphite to almost US$3,000/t in 2012.   Shortages were reported and highlighted world dependence on China which accounts for 70-80% of world production.  Since then flake demand and prices have declined due to the slowdown in China and a lack of growth elsewhere in the world. 

Five or six years ago, demand for graphite from the lithium ion battery ("LiB") industry was quite small.  However, it has been growing at over 20% per year due to the proliferation of cell phones, cameras, lap tops, power tools and other hand held devices.  Graphite is the anode material in the battery and there are no substitutes.  More recently, the growth in hybrid and all electric vehicles and grid storage have contributed to continued strong demand growth.  LiB demand already consumes 25% of graphite production and these two huge markets are still in their infancy.  It has been estimated that an additional 300gWh of LiB manufacturing capacity is currently under construction and will be operational within three years.  This will require annual flake graphite production to double.  Graphite is also a critical component of fuel cells, flow batteries and consumer electronics.

Because of supply concerns relating to China producing over 70% of the world’s graphite, and 100% of the battery material, the European Union included graphite as one of 14 “critical mineral raw materials” considered to be in supply risk.  The United States government has also included graphite on a list of mineral resources whose loss could critically impact the public health, economic security and/or national and homeland security of the United States. 

As the result of strongly growing demand from clean and green tech applications, and the supply risk related to Chinese production, graphite has become the new strategic mineral.

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