Graphite Market

Natural graphite demand is forecast to grow significantly as demand for lithium-ion batteries and active anode material accelerates leading to a near-term supply deficit in natural graphite.

Natural graphite is predominantly produced in China, Mozambique, Madagascar, Brazil with smaller scale supply from Russia and Vietnam. Natural graphite production in two northern provinces of China currently accounts for the majority of global supply. Natural graphite has many unique properties that are useful for an array of applications.

Sources of Graphite

Flake Graphite

Flake graphite is formed when deposits of carbon come under pressure and temperature and has a distinctly flaky or platy morphology. Most often hosted in metamorphic rock, flake graphite deposits are distributed fairly uniformly throughout the rock and can vary in both flake size and purity (graphitic carbon content). Flake sizes range from 180-300+ microns ("Jumbo Flake" and "Large Flake") to 75-150 microns ("Fine Flake") and each flake size category has unique applications.  In-situ ore grades for flake graphite deposits range between 2% and 30% total graphitic carbon. Most flake graphite operations process ore to a concentrate product with a graphitic carbon grade of more than 90%. Flake graphite is currently the second largest supply source of graphite globally by mass and is the most geologically common variety of natural graphite. Flake graphite is the only form of natural graphite used in significant quantities in the battery anode supply chain.

Amorphous Graphite

Amorphous graphite, which is a microcrystalline material, develops from the metamorphosis of anthracite coal seams and this graphite is a seam mineral, not a vein mineral. Amorphous graphite is the least pure, in terms of graphitic carbon grade, and generally has a higher ash content compared with other forms of natural graphite. Amorphous graphite is extracted using conventional coal-type mining techniques. Commercial graphitic carbon grades of amorphous graphite product, following extensive processing, varies from 75% to 85%. Amorphous graphite is currently the third largest supply source of graphite globally by mass.

Crystalline Vein Graphite

Crystalline vein graphite deposits contain the highest purity of natural graphite, with in-situ graphitic carbon grades ranging between 94-99%. The exact formative process of vein graphite is uncertain, but it is suspected a fluid phase deposit is transformed into graphite through a combination of time, temperature, and pressure. Vein graphite is only produced commercially in Sri Lanka although deposits also exist in the UK and the USA. Crystalline vein graphite represents a small percentage of global graphite supply by mass.

Synthetic Graphite

Synthetic graphite is manufactured through heat treatment of petroleum coke, coal-tar pitch or oil. Synthetic graphites are not a single material but are members of a broad family of essentially pure processed carbon materials. Products can be tailored to vary widely in strength, density, conductivity, pore structure, and crystalline development. These attributes contribute to widespread applicability of synthetic graphite in industrial and battery applications. Synthetic graphite is currently the largest supply source of graphite globally by mass and is used in significant quantities in the battery anode supply chain.

Uses for Different Types of Graphite

Focusing on Flake Graphite

Flake graphite deposits are characterised by particle size distribution and graphitic carbon content. Flakes come in jumbo (+50mesh), large (+80mesh), medium (+100mesh), fines (-100mesh) and powder (-200/-325mesh). In-situ carbon grades of graphite deposits range from 2% to 30% with concentration processes, such as flotation, upgrading grade of natural graphite in product concentrates to 90-98% total graphitic carbon.

Balama has a high in-situ ore grade of ~16% total graphitic carbon and Balama natural graphite finished products are high grade, at 94-98% total graphitic carbon. Balama's product range is distributed across various flake sizes with ~80% being fines (-100mesh) – the natural graphite demanded by the battery anode supply chain.

Natural Graphite Supply

Currently 65-70% of the world’s natural graphite supply is from China. Almost all of Chinese natural graphite ore supply is from Luobei and Jixi, two provinces in the north-eastern region of China. The province of Luobei is currently the largest production region for fine flake graphite in the world, and a key supply source in the battery anode supply chain alongside Balama. Natural graphite mining and processing in Loubei and Jixi is fragmented and operates seasonally with widespread shut downs occurring during Northern Hemisphere winter (November to March).

Balama is the single largest integrated natural graphite mining and processing operation globally and is a large-scale, year-round supplier of natural graphite into global markets.

Natural Graphite Demand

Natural graphite has been used in industrial processes for over 100 years for its unique material properties – lubricity, high melting point, high thermal and electrical conductivity, chemical stability and corrosion resistance.

A significant proportion of natural graphite is currently consumed in steel-related industries, where graphite is principally used as refractories in foundries or crucibles due to it is exceptionally high melting point.

Natural graphite is also used as a major additive for coatings providing lubricant, conductive and shielding benefits.

Other industrial uses for natural graphite are as strengthening additives, dry lubricants, friction products (brake pads and clutch linings), flame retardants, nuclear moderators and reflectors, sealants, graphite shapes and pencils. Synthetic graphite is exclusively used in electrodes for electric arc furnaces.

A rapidly growing use of graphite is for active anode material for lithium-ion batteries used in electric vehicles, grid-scale and behind the meter energy storage systems and consumer electronics. Fines flake graphite is the preferred raw material feedstock for natural graphite active anode material. Balama is a globally relevant, all seasons supplier of fines flake graphite and Balama's products are highly regarded in the battery anode supply chain. The largest producers of active anode material and anode precursor products globally have qualified and source Balama fines flake graphite.

Demand Profile for Natural Graphite

Natural Graphite is A Critical Raw Material

Natural graphite is considered a critical mineral by US, UK and Australian governments and the European Union due to its high intensity of use in lithium-ion batteries and requirement for electric vehicles. Supply chain participants, governments and other stakeholders recognise the significant geographic concentration in supply of natural graphite and potential future risks to regional supply security.

2040 Demand Growth for Battery Minerals

Source: IEA March 2022, The Role of Critical Minerals in Clean Energy Transitions, World Energy Outlook Special Report.

Natural Graphite Demand (Mt)

Source: Benchmark Minerals Intelligence Q3 2023, Flake Graphite Forecast

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