COM­MOD­ITY FO­CUS: GRAPHITE

Lithium has been the poster child for the boom­ing bat­tery met­als mar­ket. How­ever, what many may not know is the an­odes in lithium-ion bat­ter­ies con­tain far more graphite than they do lithium, with an­a­lysts of the view it’s just a mat­ter of time be­fore dem

The Australian Mining Review - - FRONT PAGE - EL­IZ­A­BETH FABRI

GRAPHITE de­mand and prices are about to sky­rocket.

Ac­cord­ing to Roskill, the mar­ket will soon see a rapid pe­riod of growth driven by – you guessed it – the ris­ing lithium-ion bat­tery in­dus­try.

Graphite it­self can come in two forms; nat­u­ral graphite which is mined and pro­cessed, and syn­thetic graphite which is made from pe­tro­leum coke.

Then there’s graphene; an al­lotrope form of car­bon com­pris­ing one atomic layer of graphite ar­ranged in a hexag­o­nal lat­tice, which is the strong­est ma­te­rial recorded.

In its 2018 Global In­dus­try, Mar­kets & Out­look re­port, Roskill fore­casts con­sump­tion of graphite in bat­tery ap­pli­ca­tions to be five to 10 times higher by 2027 than the cur­rent level, pend­ing the up­take of lithium-ion bat­tery elec­tric ve­hi­cles.

“Roskill fore­casts elec­tric and hy­brid ve­hi­cles could ac­count for 69 per cent of all mo­tor ve­hi­cle sales by 2027,” Roskill stated.

“With bat­tery de­mand from these elec­tric ve­hi­cles as well as an un­prece­dented surge in sta­tion­ary stor­age, the fu­ture for bat­tery graphite is ex­cit­ing.”

Aus­tralia is for­tu­nate to have a large num­ber of graphite fo­cussed ASX-listed com­pa­nies with projects at var­i­ous stages of devel­op­ment, par­tic­u­larly over­seas in Europe, Mozam­bique and Tan­za­nia.

In­dus­trial min­er­als con­sul­tant An­drew Scogings said Tan­za­nia, Mozam­bique and other nearby coun­tries such as Malawi and Mada­gas­car had nu­mer­ous graphite de­posits that were char­ac­terised by a wide range of flake sizes that could sup­ply a va­ri­ety of mar­kets.

“In fact, the term ‘ Jumbo Flake’ was coined for an East African de­posit, given that sev­eral of the East African de­posits of­ten have a higher pro­por­tion of large flakes than other lo­ca­tions,” Dr Scogings said.

“It is be­lieved that Chi­nese de­posits (China is the global leader in flake graphite pro­duc­tion) don’t have as many of the large flakes, which are in de­mand for ex­pand­able graphite used in fire re­tar­dants and in mak­ing graphite foils for elec­tri­cal and com­puter ap­pli­ca­tions.”

On the other side of the size dis­tri­bu­tion, Dr Scogings said small flakes less than 150 mi­cron were in de­mand for spher­oidal graphite.

“It is re­ported that some East African ex­plor­ers/pro­duc­ers can achieve higher pu­rity (e.g. >96 per cent car­bon) for small flakes (mi­nus 150 mi­cron) which is higher than the cur­rent 94 per cent pu­rity graphite be­ing used to make spher­i­cal graphite in China,” he said.

“The use of higher pu­rity feed­stock to make spher­i­cal graphite re­duces the cost of chem­i­cal and or heat treat­ment to raise the pu­rity to above 99.9 per cent, which is needed for bat­ter­ies.”

ASX com­pa­nies cur­rently mak­ing moves over­seas in­cluded Talga Re­sources which had es­tab­lished a ver­ti­cally in­te­grated busi­ness that starts with its large Euro­pean graphite de­posits; and Syrah Re­sources, which was now the largest global pro­ducer of nat­u­ral flake graphite af­ter com­menc­ing min­ing at its Balama pro­ject in Mozam­bique in 2018.

Closer to home there was also an emerg­ing group of Aus­tralian-fo­cussed ex­plor­ers hit­ting ground.

Re­nascor Re­sources was a leader of the pack, along with peers Lin­coln Min­er­als, Hexagon Re­sources and Min­eral Re­sources, with plans to be­gin con­struc­tion on its Siviour graphite pro­ject in 2019 and pro­duc­tion in 2020.

Re­nascor’s South Aus­tralian de­posit was con­sid­ered the largest graphite de­posit in Aus­tralia, and the fifth largest graphite de­posit in the world.

“But it’s more than just large,” Re­nascor man­ag­ing di­rec­tor David Chris­tensen said.

“We’ve been able to pro­duce a high-grade, high-qual­ity graphite prod­uct from Siviour, and our re­cently com­pleted PFS sug­gests Siviour can be among the low­est cost pro­duc­ers in the world.

“Our goal is to give Aus­tralia a world class graphite mine that can com­pete in any price en­vi­ron­ment with any devel­op­ment in the world.”

Mr Chris­tensen said the price of flake graphite (the kind most mines like Siviour would pro­duce) was cur­rently hov­er­ing between $US800 per tonne and $US1800/t depend­ing on the size and pu­rity.

“The prices have been grad­u­ally ris­ing over the last six-months and are pro­jected to con­tinue this trend, sub­ject to po­ten­tial dis­rup­tion,” he said.

“On the de­mand side, the big­gest po­ten­tial dis­rup­tion is prob­a­bly the use of flake graphite in lithium ion bat­ter­ies.

“Graphite for lithium ion bat­ter­ies cur­rently ac­counts for around one-fifth of flake graphite de­mand, but is pro­jected to ac­count for sig­nif­i­cantly more in the very near fu­ture.”

Chal­lenges

While mar­ket fun­da­men­tals looked strong, a com­mon hur­dle ex­pe­ri­enced among emerg­ing pro­duc­ers was lock­ing in fi­nance.

“Graphite is easy to find and rel­a­tively easy to mine,” Mr Chris­tensen said.

“The hard part is pro­duc­ing a prod­uct at a low enough cost to be able to fi­nance the mine’s devel­op­ment and stay in busi­ness.

Mr Chris­tensen said a point of dif­fer­ence of its Siviour pro­ject was its lo­ca­tion in a mod­ern, es­tab­lished part of Aus­tralia.

“We can start our devel­op­ment with­out hav­ing to pay large sums of cap­i­tal for in­fra­struc­ture,” he said.

“I may be bi­ased, but it’s hard to think why any other place would be bet­ter than Aus­tralia – pro­vided you can find a high-qual­ity de­posit.

“We think we’ve re­ally ticked this box with Siviour, as the pro­ject eco­nom­ics and qual­ity of the graphite prod­uct stacks up with any devel­op­ment in the world, in­clud­ing those in Tan­za­nia and Mozam­bique.”

Dr Scogings said in­vestors were also still tread­ing with cau­tion as they hadn’t seen the dra­matic price in­creases in graphite as for lithium.

“How­ever, the word in the mar­ket is that graphite prices are ris­ing, that the Chi­nese are im­port­ing graphite and ap­par­ently are pre­pared to pay more for higher pu­rity prod­ucts es­pe­cially in the bat­ter­ies mar­ket,” Dr Scogings said.

“The graphite mar­ket is also rel­a­tively di­verse with a wide range of spec­i­fi­ca­tions (e.g. flake size dis­tri­bu­tion and pu­rity) in ad­di­tion to mois­ture, bulk den­sity, trace el­e­ment im­pu­ri­ties and also per­for­mance re­quire­ments such as ex­pand­abil­ity and ox­i­da­tion tem­per­a­ture.”

Dr Scogings said an­other key re­quire­ment of min­ers was to pro­duce con­sis­tent qual­ity graphite over ex­tended pe­ri­ods of time.

“In­dus­trial cus­tomers such as re­frac­to­ries man­u­fac­tur­ers and spher­oidal graphite pro­ces­sors need to have con­sis­tent siz­ing, pu­rity and mois­ture con­tents for ex­am­ple,” he said.

“Pro­duc­ing con­sis­tent graphite qual­ity is dif­fi­cult if the de­posit (the ore­body) hasn’t been ex­plored/de­fined in suf­fi­cient de­tail to en­able se­lec­tive min­ing if re­quired, blend­ing and con­sis­tent feed to the flota­tion plant to en­able con­sis­tent prod­uct stream.”

Mr Chris­tensen agreed, cit­ing con­sis­tency as a chal­lenge that of­ten “gets over­looked” by in­dus­try.

“High-qual­ity and low cost are es­sen­tial, but the pro­ject must demon­strate the abil­ity to be con­sis­tently high-qual­ity and low cost,” Mr Chris­tensen said.

“We think this is where we have an­other real ad­van­tage with Siviour.

“We have one mas­sive de­posit (rather than a se­ries of de­posits), so we will al­ways be of­fer­ing from the same source and de­liv­er­ing the same high-qual­ity.

“To date, we’ve tested our ma­te­rial at labs all over the world (Aus­tralia, North Amer­ica, Europe and China), and we’ve con­sis­tently demon­strated the abil­ity to de­liver.”

Dr Scogings said other im­por­tant fac­tors were de­ter­min­ing what prod­ucts can con­sis­tently be ex­tracted from the ore, and whether the pro­posed prod­ucts per­form in tar­geted mar­kets and of­fer com­pet­i­tive ad­van­tage.

“Fur­ther im­por­tant fac­tors are lo­ca­tion, lo­gis­tics and sov­er­eign risk with cost of lo­gis­tics of­ten a game changer,” Dr Scogings said.

“A well-known say­ing for in­dus­trial min­er­als such as graphite is that ‘with­out a mar­ket, an in­dus­trial min­er­als de­posit is merely a ge­o­log­i­cal cu­rios­ity’.”

Im­age:SyrahRe­sources.

ASX-listed Syrah Re­sources’ Balama graphite mine in Mozam­bique was opened in 2018.

In­dus­trial min­er­als con­sul­tant Dr An­drew Scogings.

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