I believe that the markets are once again under pricing metal mine similar to how lithium mines are still undervalued but have seen their stocks begin to soar in 2017.
Here is some of the most valuable research I found on graphite/The mines im interested in,you may find useful if you choose to invest in the metal.
Canadian graphite miners are angling to be high-end suppliers to the global lithium ion battery market, where companies such as LG, Samsung, Mitsubishi and Hitachi are fuelling growing demand for new technologies ranging from smartphones and laptops to electric cars.
After decades of near-dormancy in the graphite industry, an increasing number of companies are racing to produce flake graphite, the purest natural form of the mineral touted for its lightness, extreme resistance to heat and high conductivity.
The mineral is a major component of lithium batteries – lighter and more powerful than traditional batteries – that are finding their way into ever broader markets, from laptops and cordless power tools to hybrid electric vehicles.
Global graphite demand is about 1.14 million tonnes, split nearly evenly between the large flake variety and amorphous graphite used for industrial purposes, according to Industrial Minerals.
Demand for graphite (carbon) used as anode material in lithium ion batteries is set to increase by over 200% in the next four years as global cell production surges on the back of maturing pure electric vehicle demand and the inception of the utility storage market.
What is Graphite?
Graphite is one of the most versatile non-metallic minerals in the world.
- An excellent conductor of heat and electricity
- The highest natural strength and stiffness of any material
- Maintains its strength and stability to temperatures in excess of 3,600 °C
- One of the lightest of all reinforcing agents
- High natural lubricity
- Chemically inert with a high resistance to corrosion
The Three Varieties of Graphite
There are three distinct types of natural graphite which occur in different kinds of ore deposits:
1. Flake Graphite
- Less common form of graphite
- Carbon range of 85-98%.
- Priced ~4X higher than amorphous graphite
- Used in many traditional applications
- Desirable for emerging technology graphite applications (e.g. Li-ion battery anode material)
2. Amorphous Graphite
- Most abundant form of graphite
- Comparatively low carbon content of 70-80%
- No visible crystallinity
- Lowest purity
- Not of suitable quality for use in most applications
3. High Crystalline Graphite (vein, lump or crystalline vein)
- Only extracted from Sri Lanka
- Carbon content of 90-99%
- Scarcity and high cost restricts viability for most applications
Synthetic graphite is a manufactured product made by high-temperature treatment of amorphous carbon materials. In the United States, the primary feedstock used for making synthetic graphite is calcined petroleum coke and coal tar pitch. This makes it very expensive to produce — up to 10 times the cost of natural graphite – and less appealing for use in most applications.
Graphite prices are a function of 2 factors – flake size and purity – with large flake (+80 mesh), high Carbon (+94%) varieties commanding premium pricing.
Type of Natural Graphite
Average Price ($/tonne January 2013
Small Flake (95% – 98%
$900 – $1,200
Medium Flake (95% – 98%)
$1,050 – $1,400
Large Flake (95% – 98%)
$1,400 – $1,800
Jumbo Flake (95% – 98%)
Battery Grade Flake (99.9%)
$5,000 – $20,000
Graphite: A key role to play in green technology economy
As the green technology economy grows, demand for graphite is expected to outstrip supply over the next decade. For just one market – electric vehicles – estimated demand by 2020 would require more than is produced globally today (China is by far the world’s No. 1 graphite producer). For example, there is up to 10 times more graphite in a li-ion battery than lithium.
UBS is bullish on the graphite and lithium demand. By 2025, they expect the graphite market to grow by 1.7x as per their base case scenario or by 2.0x if the upside scenario plays out. For lithium, this is by 4.5x and 7.5x respectively. The graphite market today is much bigger than the lithium market. UBS evaluates it at $16.2B while it is $2.7B for lithium.
The world flake graphite market is roughly 450,000 tonnes on a yearly basis. The growth multiple of 1.7x on the total graphite market by 2025 looks conservative to me when we look at the combined li-ion battery capacity currently in construction or expansion around the world. We know that Tesla’s Gigafactory 1 in Nevada needs 50 GWh of li-ion packs as soon as next year. That will give Tesla enough batteries for a production rate of 500,000 cars. 50 GWh is 50,000,000 kWh.
Growth in sales of electric and hybrid electric vehicles is expected to generate significant growth in demand for lithium ion batteries.
1. SRG Graphite (TSXV:SRG)
SRG Graphite’s senior managers and directors rang the opening bell at the Toronto Stock Exchange on October 2 to “celebrate the stock’s noteworthy performance” since it began trading on the exchange on January 16, 2017.
The company is focused on its Lola graphite project in Guinea, West Africa, and recently engaged Montreal-based Met-Chem to conduct a preliminary economic assessment (PEA) for the project. The PEA is expected to be released in December 2017. Company President and CEO Marc-Antoine Audet said the next step will be to “upgrade the study to a feasibility level in mid-2018.”
Standard Graphite (TSX-V: SGH)
Standard Graphite Corp. is rapidly positioning itself as North America’s premier pure-play graphite exploration & development company. The company is currently developing the historic Mousseau East graphite deposit in Southeastern
Graphite demand is forecast to be very strong in the next 5 years. Benchmark Mineral Intelligence forecasts “the anode market – which is nearly exclusively served by naturally sourced spherical graphite and synthetically produced graphite – to increase from 80,000 tpa in 2015 to at least 250,000 tpa by the end of 2020, while the market could be as large as 400,000 tpa in the most bullish of cases with no supply restrictions.” Note, at least 70% of all battery anode material is sourced from natural spherical graphite, 30% from synthetic graphite material (which is more expensive). Flake graphite is the feedstock source for spherical graphite. In December 2016, China announced they plan to stockpile graphite as one of the critical elements.