Updated: Sep 16
Graphite is the largest component in lithium-ion batteries by weight and is essential in the move towards global uptake of electric vehicles and reduction of reliance on fossil fuels. Each lithium-ion battery contains around 20-30% of graphite by weight.
This week Benchmark Mineral Intelligence released a graphic showing how serious the supply shortfall for graphite is expected to be. In 2022 the expected supply of natural graphite will be around 1.1 million tonnes. Benchmark estimate by 2035, over 7 million tonnes of natural graphite will be required to supply the surging demand for EV batteries. That is an additional 6 million tonnes by 2035.
Graphite is so essential to the lithium-ion battery that Elon Musk, CEO of Tesla, noted “Our cells should be called nickel-graphite, because primarily the cathode is nickel, and the anode side is graphite with silicon oxide”
The graphite anode material is manufactured from either flake graphite produced from graphite mines or synthetic /artificial graphite. And only flake graphite with 99.95% purity is suitable.
China currently dominates battery anode capacity, meeting around 91% of global supply according to figures from Benchmark Mineral Intelligence.
There are several issues with synthetic graphite as a base for EV batteries, some of which have been highlighted recently. The starting point is a coal-based residue which then requires significant energy to be heated to around 2,800 Celsius to achieve graphitisation.
This week China announced a summer power crunch in the Sichuan province which could result in higher global synthetic pricing and result in OEMs and battery makers scrambling for sustainable global supply for natural graphite and battery anode material
Historically around 75% of natural graphite used in EV batteries has been produced and processed in China. With global concerns around supply chain sustainability, Co2 footprint and ethical production, Countries outside China with sustainable natural graphite and renewable energy are in the driver’s seat.
Some of the companies looking to supply sustainable, natural graphite include:
Volt Resources Limited (ASX: VRC; FSE: R8L)
Volt Resources is developing a global focused downstream graphite and battery anode capability.
The Company has a 70% share of a major resource in Ukraine – the Zavalievsky mine and processing plant. In August it was announced the mine would re-start operations which has been temporarily halted due to the war. The mine is one of the longest continually operating graphite mine in Europe –having commenced operations in since 1934. The mine is expected to produce between 8,000 and 9,000 tonnes of graphite or the 2023 financial year. Volt’s estimate of tonnage of mineralization of the south-eastern area of Zavalievsky Project in Ukraine total 22.9 million tonnes at a grade of 6.8% carbon.
Volt Resources also has a major graphite reserve in Tanzania with the largest JORC resource in the country estimated at 461Mt @ 4.9% TGC. There is considerable upside potential with this resource with exploration to date covering less than 6% of the land area. The flake distribution is suitable for battery anode materials. According to Benchmark Mineral Intelligence, Africa could overtake China as the world’s largest producer of natural graphite for lithium-ion batteries as early as 2026. Tanzania alone as reserves estimated at 18 million tonnes.
The Company is also progressing Battery Anode Material activities in the United States and Europe and forming alliances with key players such as with Energy Supply developers (ESD). Volt resources shares are traded on the Australian Stock Exchange and in Germany on Frankfurt, Tradegate, Munich, Stuttgart, and Berlin exchanges.
International Graphite Limited (ASX: IG6; FSE: H99)
The company is developing Western Australia’s first vertically integrated graphite facility with a world class graphite resource at Springdale and a downstream graphite processing at Collie. The plan is for the downstream processing plant to service global markets whilst delivering customer-focused products meeting world best environmental practices and international standards of quality and safety.
International Graphite recently announced a MoU with ZEN Energy to supply renewable energy to its graphite processing plant at Collie in Western Australia. Power and energy is one of the largest CO2 footprints for graphite anode material and the relationship with ZEN Energy is perfectly timed as Europe moves toward a carbon footprint declarations for OEMs and car makers.
International Graphite has previously announced the graphite Springdale resource stands at 15.6 million tonnes with 6% TGC and a higher-grade component of 2.6 million tonnes with 17.5% TGC. An extensive drilling program of 37 drill holes for about 2,800 metres will be used to assess additional targets which may yield 54 million tonnes in graphite reserves.
In September the company used reverse circulation drilling to discover a new shallow grade deposit which has been termed Springdale Far West. The Chairman of International Graphite, Phil Hearse, said “we have intersected multiple shallow zones of high-grade mineralisation, which consistent with the existing resource, appears to be amenable to simple open pit mining”.
Also in September, International Graphite, announced the pilot plant for micronizing and spheroidising graphite has been commissioned. According to the Company, the pilot plant is the most advanced and largest known of its type in Australia and sets the company on course towards full-scale commercial production. The micronized and spheroidised graphite product will be purified and coated to produce a Battery Anode Material product for sale in Australia and globally.
Sarytogan Graphite (ASX: SGA)
The Company is the owner of 100% of the Sarytogan Graphite Project in Central Kazakhstan with an exploration concession of 70sqk. The Company was listed on the ASX on 14 July 2022.
Exploratory diamond drilling is well advanced with plans to undertake a total of 4kms of drilling to determine mineral resources. The company raised over $A 8 million from the IPO which, according to the Company, should be sufficient for two years exploration work.
According to Managing Director, Sean Gregory, “the drilling will advance our understanding of the giant Sarytogan Graphite Deposit which is already the highest-grade an second largest deposit amongst all globally listed companies”.