As China tightens its export control ratchet yet again this week (see our latest post), here comes another visual reminder of why Beijing’s actions are relevant and concerning:
Our friends at Benchmark Mineral Intelligence have put together a new infographic illustrating China’s critical mineral supply dominance specifically for graphite anodes.
Before Beijing unleashed its latest salvo of export restrictions – this time for Rare Earths – graphite was the lastest material to find itself in the Tech War crosshairs with the announcement that to protect national security, China would require export permits for certain graphite products – a move analysts saw as a play “to control supplies of critical minerals in response to challenges over its global manufacturing dominance.”
As the largest component by volume and mass in EV batteries, graphite is considered a battery critical and has been deemed the “unsung player” in the battery supply chain. According to Benchmark data, Chinese production accounts for 74% of the total supply chain for graphite anodes, posing a risk for anode producers in South Korea and elsewhere.
Diversifying supply away from China represents a massive challenge as China “is on track to retain over 85% of the global anode market share by the end of the decade,” according to Benchmark analyst Tony Alderson.
For a full size look at the infographic, which clearly illustrates not only the scale of the graphite challenge, but also provides a window into technical and sustainability questions surrounding it, and for more detail on synthetic versus natural graphite, click here.
Over the course of the past few years, the U.S. has taken several important steps to decouple critical mineral supply chains from China, especially those for battery materials and chip manufacturing, ranging from DPA Title III designations and subsequent Department of Defense funding of projects to federal legislation providing funding for projects from the U.S. Department of Energy.
In the graphite realm, projects currently underway are expected to qualify for the IRA credits, and ultimately help “domesticate” the graphite supply chain, including Graphex’s pitch coating facility coming online in Michigan, and Graphite One Inc.’s effort to establish an all-American mine-to-manufacturing supply chain. Graphite One’s Graphite Creek deposit near Nome, Alaska was recently recognized by the U.S. Geological Survey as the largest U.S. graphite deposit and among the largest in the world, and, since July, the company has been selected for two Department of Defense grants, under the Defense Production Act’s Title III authorities and by the Defense Logistics Agency.
Positive moves in each case, but, as the infographic clearly demonstrates, more remains to be done – particularly in light of China’s obvious readiness to weaponize its dominance in the critical minerals realm.
