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EV uncertainty dominates discussion at Graphite Conference – Part 1

This is the first of a two-part post by American Resources Expert Simon Moores and his Industrial Minerals colleague, Andy Miller. Check back tomorrow for Part Two.

The future for electric vehicle (EV) batteries dominated discussion at Industrial Minerals 2nd Graphite Conference in London last week, despite being only the fourth largest market for the industry.

Graphite’s use as the anode material of choice in lithium-ion batteries has gained it critical mineral status which has buoyed the sector over the last 18 months. By volume graphite is the largest raw material used in lithium-ion batteries – an electric vehicle (EVs) contains between 28kg and 28kg of graphite.

The question still remains how much graphite will be needed if EVs take off. The battery sector serving EV manufacturers has the potential to grow at 20% a year, but by volume is still far off the leading consuming market – refractories.

Refractories – high temperature linings and bricks consumed primarily in steel manufacturing – consumed 39% of natural graphite production in 2012 with batteries accounting for 9%.

Despite this, discussions centred on EV battery potential and the technology to process the raw material into a product suitable for the sector, namely spherical graphite.

China holds the bulk of spherical graphite processing technology at present, something which is of concern to western manufacturers. China also produced 79% of natural graphite output in 2012, an even more immediate concern to the industry eager to avoid a rare-earths style dependency.

These are some of the main factors that have sparked into exploration activity over the last 18 months, especially in Canada which has led the world’s search for new graphite projects. These newer entrants were understandably more bullish on future demand than existing producers at the conference.

Graphite has recently gone through what lithium and rare earths experienced a few years ago. The furore which engulfed the industry in 2011 has calmed significant in 2012 as access to investment became difficult for many publically traded junior companies in North America.

2013 is expected to see an upturn.