Miners race to realise graphite projects as China controls exports
20/10/2023 17:21
By Nelson Banya and Clara Denina
Oct 20 (Reuters) - As China moved to control some
exports of key battery mineral graphite on Friday, miners
elsewhere face a race against time to bring new projects to
fruition to secure supplies for the next generation of electric
vehicles.
China will require export permits for some graphite products
to protect national security, its commerce ministry said, in its
latest move to safeguard supplies of critical minerals and
protect its manufacturing dominance.
The world's top graphite producer and exporter also refines
more than 90% of the material used in virtually all electric
vehicles' (EVs) battery anodes, which is the negatively charged
portion of a battery.
The next generation of EVs is due to hit around 2025 and
several carmakers have sought help plugging gaps in supply after
years of pandemic-related parts shortages highlighted the risks
of over-reliance on one country.
To stay ahead in a fast-changing industry, carmakers have
been investing directly in mining projects to ensure future
supplies of the battery inputs.
But building mines takes between five and 10 years, meaning
China will keep its lead in supplying graphite for at least half
a decade, miners in other countries say, as those projects are
mostly still in pre-production.
"What China is saying to the West with this decision is that
we are not going to help you make electric cars, you have to
find your own way to do that," Northern Graphite NGC.V CEO
Hugues Jacquemin said.
China's move took multiple sectors by surprise, with some
end-users fearing more curbs could follow.
"We see China's move as a potential catalyst to highlight
the urgency of improving domestic graphite supply," said John
DeMaio, president of Graphex's graphene division.
"We've aligned ourselves with several graphite miners
outside of China. I would imagine this news will accelerate
their plans to bring capacity online in the near term," DeMaio
said.
Graphex Group 6128.HK plans to open a graphite processing
facility in Warren, Michigan, by the end of 2024 that aims to
supply U.S. automakers with at least 10,000 metric tons per year
of the key metal, the largest component in an EV battery.
Commodity producing and consuming giant China dominates
other critical minerals including forms of refined cobalt,
nickel and manganese as well as rare earths, a group of 17
elements used in products from lasers and military equipment to
magnets found in electric vehicles, wind turbines, and consumer
electronics such as iPhones.
"The battery controls a lot of the cost of a vehicle, so if
carmakers outside of China are forced to use very expensive
materials or can't access them,...that is going to ramp up their
prices or force them to purchase the batteries from Chinese
battery manufacturers," said Stefan Bernstein, CEO of GreenRoc
Mining GROC.L , owner of a graphite project in Greenland that
is due to reach production in 2027.
Northern Graphite's Jacquemin said the company had been
getting calls from OEMs (Original Equipment Manufacturers) on
what impact China's latest move would have, concerned about
supply security for batteries and other electronics equipment.
He said China's move meant Northern Graphite could
encourage investors to raise money to hit production by 2027.
Shishir Poddar, Executive Chairman of Tirupati Graphite
TGRT.L , which has mining and processing operations in
Madagascar and recently acquired two projects in Mozambique,
said the import curbs will "further boost the development of
ex-China graphite activities".
(Reporting by Nelson Banya, Clara Denina, Divya Rajagopal,
Ernest Scheyder; Editing by Veronica Brown and Elaine
Hardcastle)
((Nelson.Banya@thomsonreuters.com;))