Ceylon Graphite – The new gold

Not many are aware that Sri Lanka boasts of the world’s purest form of graphite, that is vein Graphite. That’s possibly because Graphite has habitually been deemed a dull, unexciting industrial mineral, reminding of pencils, steel making and tennis racquets.

But graphite mining industry in Sri Lanka has a history as far back as 200 years. During the two world wars, approximately 35,000 metric tons of natural graphite per annum was exported from Sri Lanka. Sri Lanka is the only area to produce vein Graphite in commercial quantities.

Canadian company, Ceylon Graphite Corpis, a public company listed on the TSX Venture Exchange in Canada, has realised the potential of ‘Ceylon Graphite’ and for the past two years and is in the business of exploring and developing lump vein Graphite mines in Sri Lanka.

“The Government of Sri Lanka has granted Ceylon Graphite Corp exploration rights in a land package over 100 km of exploration grids. These grids cover all relevant areas that had historical lump vein graphite production dur- ing the 1900s to 1930s representing majority of the government’s known vein graphite occurrence in Sri Lanka. Ceylon’s lump vein graphite is unique and has higher quality than normal flake graphite, and currently accounts for less than 1 per cent of the world graphite production,” Sasha Jacob, main shareholder of Ceylon Graphite Corp told the Business Times earlier this month.

The lithium-ion battery is one of the fastest- growing uses of graphite. Graphite serves as the anode in lithium-ion batteries, and there is no substitute for it in this application. Each one in fact contains greater than 10 times more graphite than lithium. These batteries are already widely utilised in the consumer electronics industry in devices like mobile telephones, laptop and tablet computers, and media players. Recognising the demand that lithium-ion batteries in electric vehicles and storage would have for graphite ( each battery contains more graphite than lithium), Ceylon Graphite Corp is in active discussions to form a joint venture with the largest battery manufacturer to produce battery anodes in Sri Lanka. This value added production will bring significant high value jobs into the country, in addition to the large employment coming from the mining operations.

Traditional demand for graphite in the steel and automotive industries is growing 5 per cent annually, and graphite prices have tripled, data shows. New applications such as heat sinks in computers, fuel cells, and nuclear and solar power are all giant users of graphite. These consumers are starting to place sizeable demands on existing produc- tion— and over 70 per cent of that production is from China, which is no longer selling this resource cheaply to the rest of the world as the country's easy-to-mine, near-surface deposits are becoming exhausted. “And what China produces isn’t ‘ natural’. Its synthetic which is a prime reason why it’s so costly,” Mr. Jacob said noting that Ceylon Graphite is comparatively cheaper. He also noted that the electric vehicle market is expected to grow as much as 20 per cent annually by 2020, with expectations that between 3 to 6 million such vehicles will be manufactured in 2020, each of which will require approximately 40 pounds of graphite for the battery system alone. “The lithium-ion battery is also being used for renewal power storage facility so we expect the home storage market will be as high as the car market,” he said.

During the two world wars, approximately 35,000 metric tons of natural graphite per annum was exported from Sri Lanka