Tapping into graphite boom a rocky road
Any talk of electric vehicles draws intense response from readers, much of it positive, some of it smartly critical.
Here’s one. “Remember a Tesla battery contains about 150 lbs of graphite which is a product so toxic that it is only allowed to be mined in CHINA (where worker safety is of little importance).”
Yes, China produces the lion’s share of the world’s graphite, as key a component in the lithium-ion battery as the lithium itself.
According to the U.S. Geological Survey, China produced 66 per cent of the world’s graphite in 2016. India was a distant second at about 14 per cent.
And serial reports out of China document the grey shroud settling on villages adjacent to graphite production. Last October, the Washington Post reported on five towns in two provinces of China where reporters heard the same story repeated from villagers living near graphite companies, as the glittering commodity drifted onto window sills, across clotheslines: “sparkling night air, damaged crops, homes and belongings covered in soot, polluted drinking water — and government officials inclined to look the other way to benefit a major employer.”
What has drawn little mention are the companies in Ontario trying to nose into the graphite market. Five years ago, there was all this talk of a graphite boom in the province.
Ontario Graphite Ltd. was one hopeful company, indicating to the Star that it planned to bring the out-of-commission graphite mine near Kearney back into production in September 2012.
That it didn’t is a story of the broad struggles in the junior mining industry and the inability to tap deep enough wells of capital. Or, as chief financial officer Ellerton Castor phrases it with understatement, “Liquidity issues are not something that the junior mining space is unfamiliar with.”
A lot has changed in six years, including the revving up of not just electric and hybrid vehicles but rechargeable battery demand overall. “It’s being driven by additional rechargeable battery technologies like power walls, large batteries being manufactured for power storage and grid management in the energy sector,” Castor says. “There are a large number of sectors and industries into which graphite, as an anode material, is going to be sold in order to fulfil the demand for rechargeable battery production.”
Ontario Graphite’s site is little more than two kilometres from the western boundary of Algonquin Park, just south of Graphite Lake by the headwaters of the Magnetawan River. The lake, deemed a fish sanctuary by the province, flows into the Algonquin Park watershed. The mine site, an open-pit operation with tailings and polishing pond, was operated for six years by another company, International Graphite Inc., which ceased operations in 1994.
Ontario Graphite took control of the property in 2010. In doing so, the company was compelled to file a closure plan with the province, stipulating how the site will be remediated once the ore resources have been tapped out.
Prices have been fickle. Large flake graphite peaked in 2012 at more than $2,500 (U.S.) a ton. In this market, the size of the flake determines the value of the commodity. But prices collapsed, with smallflake graphite falling close to $500 a ton.
It is here we find the confluence of environmental concerns and money, or lack thereof. Three days before Christmas in 2015, Ontario Graphite notified the Ministry of the Environment and Climate Change (MOECC) that the method of balancing the PH levels in the polishing pond — neutralizing the acidic water with lime — had ceased.
The company later confirmed to the ministry that the treatment had actually ceased on Nov. 19. Two inspections of site effluent by the MOECC were conducted in January 2016. Preliminary results of acute toxicity analysis found a 100-percent mortality rate with test organisms, including rainbow trout, within 24 hours. It’s hard to fathom that a company could be so skint as to be unable to pay for the lime to keep the ponds in environmental check.
The ministry in its report noted that the company was even unable to pay for the analysis bottles required for regular monitoring. An MOECC director’s order issued that month demands that the company be brought into compliance by ensuring lime stockpiles and daily PH readings. Asked to comment on the serious nature of the infraction, Ellerton Castor responds first with an explanation of bridge financing that had failed to come through in a timely fashion, describing the issue as a “very temporary blip on the company’s radar screen.” Subsequent to an $8-million injection, “We’ve had the ability to return to a liming, testing, sampling and reporting regime.”
Later, he adds, “Take nothing that I have said or the way in which I have said it to indicate that there was any lack of contrition,” adding that the site was devoid of any environmental management until the company took control of it.
In an email, a spokesperson for the ministry says the MOECC “takes the environmental issues at the Kearney Graphite Mine seriously” and continues to closely monitor compliance.
Castor says the tough days are behind it. A listing on London’s AIM exchange is targeted for the fall, followed by a nine-month period of construction and production midyear 2018.
Elon Musk’s Gigafactory is forecast to reach full production in 2018. Estimates of Tesla’s tons-per-year graphite consumption run as high as 120,000. Maybe Ontario will be a player in that. Now, disposing of those batteries, that’s another story. jenwells@thestar.ca
It’s hard to fathom that a company could be so skint as to be unable to pay for the lime to keep the ponds in environmental check