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Supply crunch may loom for Graphite

In an article this week, Resource Investing News is asking: “Will the U.S. Produce Graphite?”

As the piece points out, with China producing roughly 80 percent of global graphite output, and the U.S. not producing the metal in spite of the fact it is considered a critical mineral, “it is imperative that the US find graphite sources, preferably in its own backyard, in case China puts a rare-earth-elements style ban or quota on exports.”

Here are some of the article’s key points:

  • While the U.S. produced graphite a good one hundred years ago, according to a New York Times article, no graphite has been mined in the U.S. since 1990, according to USGS data.
  • Some geologists argue that the U.S. “lacks deposits because of its geology,” though there are companies pursuing graphite exploration efforts in the U.S., such as Graphite One, which is expanding a project in Alaska, and Alabama Graphite, operating in its namesake state.
  • Graphite production in the U.S. is still a long way off but China’s policies are raising the specter of a potential graphite supply crisis. According to American Resources expert and London-based graphite market specialist with Industrial Minerals Simon Moores:
      • While there are no rare-earth style export quotas coming from China at present, the country “is doing things that could restrict the raw materials supply. The government doesn’t like exporting raw materials that other people make money from. It is trying to build a value chain to unlock the value in its natural resources.”
      • China is trying to build finished products for which it previously exported flake graphite to Japan domestically, which will result in less raw material leaving the country.
      • “In addition, China is trying to control its sprawling mining industry by forcing consolidation. Graphite is a perfect example of a sprawling Chinese mining industry.”

Meanwhile, graphite exploration efforts outside of China are growing. Graphite and beyond, the United States would be well-advised to take a more strategic approach to its mineral exploration policies if it does not want to lose ground in the global race for resources.

  • Sariddle

    The graphite industry has many different types of Graphite. For example when someone says graphite is not produced in USA they are incorrect. The USA is a major producer of Synthetic Type Graphite” and this is the type of graphite mostly used today in Li-Ion Batteries. If however they said the USA does not mine or produce “Natural Flake Type Graphite” this is true. So ask what products can only use “Natural Flake Graphite” and then you can decide on your own how critical is it for the USA to mine and produce this type of Natural graphite?