Get to Know Green Metals: Graphite
May 25, 2023
Watch Time 4:13 MIN
Expectations of demand growth in electric vehicles and stationary energy storage should drive the demand for lithium-ion batteries, and therefore create interesting investment opportunities for several raw materials.
My name is Charl Malan, and I'm the Senior Metals and Mining Analyst at VanEck.
Welcome to Get to Know Green Metals: a series of short educational videos concentrating on the importance of green metals as they relate to resource transitioning.
And in this episode, we focus on graphite.
Okay, so graphite is not a metal, but it's still core to resource transitioning. Actually, it might be the most important, and that is because of the role the anode plays in the lithium-ion battery. Graphite has some very interesting properties. Firstly, it is excellent at conducting electricity, which is unique for a nonmetal. And then it has a very high melting point, and also it is chemically stable. Graphite can either be manufactured from petroleum coke and coal tar to create a synthetic graphite, or it can be mined as a natural graphite.
Today, a significant portion of graphite is consumed in the steel industry in melting down scrap metal. However, graphite is becoming quickly recognized for its key role it can play in resource transitioning. Specifically natural graphite and that's because of its smaller environmental footprint as well as lower cost of production.
Global natural graphite mine production is not large. Around one million tonnes per year. As with lithium, and go watch our lithium video for more information, global graphite production is highly concentrated, with China, Brazil, Mozambique, and Madagascar being the largest producers. But developments in North America could result in it becoming a much larger producer.
Graphite is the material for a green economy, which is why it is classified as a critical material by so many governments.
Almost all, around 95%, of an anode in a lithium-ion battery is made from graphite. And despite the development of different battery chemistries, there is no substitute for graphite.
On average, it accounts for around 50% of the demand. And by weight around 20 to 30 percent of an average lithium-ion battery, compared to lithium of around 5 percent.
Therefore, graphite is the single largest component in a lithium-ion battery.
Looking forward, natural graphite demand is projected to grow by more than 300% by the year 2030 and could reach 6 million tonnes by the year 2035. The demand for natural graphite is also expected to outpace the demand for all other battery materials.
As with many other green metals, the big challenge is supply. It is estimated that 100 new mines need to be built. Currently, there are about 45 new graphite projects outside of China, of which an estimated 40% are within Africa, 30% in North America, and 15% in Australia, and each of those regions poses numerous and very separate challenges, such as funding, infrastructure, water and ESG to name a few.
Next time on Get to Know Green Metals, we take a closer look at Cobalt. Subscribe to obtain more insights into natural resources as well as updates on this video series. Thanks for watching.
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