Amongst the hottest strategic critical minerals of the decade, graphite is available in two main forms – i) natural graphite that is directly sourced from mines and ii) synthetic graphite that is made from petroleum coke. Amorphous (60-85pc carbon), flake (>85pc carbon), and vein (>90pc carbon) are the major types of natural graphite.
There are number of beneficial properties of graphite, owing which its application is surging in several fields. Some of the properties are:
- Highly corrosion resistance
- Good conductor of electricity and heat
- Has highest natural strength and stiffness of any material
- Light Reinforcing Agent
- Highly lubricating material
- Capable of maintaining strength and stability to temperatures more than 3,600°C
How is Graphite Priced?
Transactions concerning graphite are largely based on direct negotiations between the parties involved. The pricing of graphite is determined based on several factors including flake size, carbon percentage, and the purity of the product.
Pricing of natural graphite concentrate could vary in the range of $400 to $2,500 for each tonne, depending on the product specifications.
What Can Impact Graphite Prices in the Future?
In the upcoming years, demand for graphite is expected to grow at a fast pace, thanks to surging demand for lithium-ion battery production driven by electric-vehicle adoption and energy storage.
Moreover, demand for graphite is growing in the expandables market including fire retardant building materials, graphite foils and specialised gaskets. As due to climate change and global warming, incidents such as recent bushfire in Australia are increasing, huge demand for fire retardant building materials is expected in the near future.
Demand for this product holds the potential to surpass the demand growth for EVs, as several countries have already rolled out new legislation requiring flame retardants in building codes, while several others are considering bringing the legislation over combustibility and safety concerns.
In fact, according to some research reports, the fire retardant building materials market is projected to reach approximately $ 400 million by 2026.
Other major application areas for graphite include crucibles/refractories, steel production and lubricants.
The promising growth in all the above-mentioned fields seem supportive for the prices of graphite in the near future.
How This Huge Demand Will Be Met?
For several decades, China accounted for the largest share in the flake graphite production market, globally. However, with growing labour, energy, and environmental issues / costs, mining costs in the Asian countries are continuing to increase.
Moreover, with a rapid expansion in the global demand for graphite, which is also being called as the new black gold, need for more geographically diversified sources of high-quality supply of graphite is growing.
Consequently, Africa is emerging as a potential source of low-cost production, with countries including Mozambique, Tanzania and Madagascar becoming the emerging production hubs for graphite.
BlackEarth Minerals NL – Set to Deliver Low Cost, High Value Product
Several graphite players are already producing graphite in these countries, while several others are working on bringing new graphite mining projects in the production phase. One such company is BlackEarth Minerals NL (ASX: BEM), which is a minerals development company that is completely focused on fast tracking its flagship Maniry graphite project in southern Madagascar, a country with a 100+ year history and reputation for quality graphite.
The primary aim of the company is to produce high value, high demand, coarse flake product, based on a positive outlook for large flake high quality graphite for the upcoming 10-15 years.
As of now, all the testing results have highlighted significant and promising results for the project. The current project study results have demonstrated the project as “a robust and financially attractive graphite project by global standards.”
Source: Presentation - Africa Down Under September 2019
Currently, the company is in discussions with several players to execute offtake partnership agreements. BEM plans to commence the Maniry graphite project commissioning in 2021 after finalising the project feasibility study in the current year (2020).
On 10 January 2020 (AEDT 03:42 PM), the stock of BEM, a Madagascar bred and Australian born company, was trading at $ 0.050, up 2.041% from its previous closing price, with a market cap of $ 5.65 million and approximately 113 million outstanding shares.
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