China’s latest move to control exports of key battery mineral graphite has set off a scramble among miners worldwide to expedite new projects and ensure a steady supply for the upcoming generation of electric vehicles (EVs). The decision comes as part of China’s efforts to safeguard its supplies of critical minerals and maintain its manufacturing dominance.
China, the world’s leading graphite producer and exporter, also refines over 90% of the material used in the battery anodes of virtually all electric vehicles. With the next generation of EVs expected to hit the market around 2025, several automakers are seeking to bridge supply gaps, following years of pandemic-related parts shortages that have highlighted the risks of over-reliance on a single country.
To remain competitive in this rapidly evolving industry, car manufacturers have started investing directly in mining projects to secure future supplies of battery inputs. However, the lengthy timeline for building mines, ranging from five to ten years, implies that China will maintain its lead in supplying graphite for at least half a decade, according to mining firms in other countries.
Hugues Jacquemin, CEO of Northern Graphite (NGC.V), remarked, “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.”
China’s unexpected move has taken various sectors by surprise, with some end-users fearing further restrictions. John DeMaio, president of Graphex’s graphene division, stated, “We see China’s move as a potential catalyst to highlight the urgency of improving domestic graphite supply.” He added, “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.”
Graphex Group (6128.HK) plans to open a graphite processing facility in Warren, Michigan, by the end of 2024. Their goal is to supply U.S. automakers with at least 10,000 metric tons per year of the essential metal, a key component in EV batteries.
China’s dominance extends to other critical minerals, including refined cobalt, nickel, manganese, and rare earths. The latter, a group of 17 elements used in products ranging from lasers and military equipment to magnets found in electric vehicles, wind turbines, and consumer electronics like iPhones.
Stefan Bernstein, CEO of GreenRoc Mining (GROC.L), the owner of a graphite project in Greenland due to reach production in 2027, noted, “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.”
Jacquemin from Northern Graphite stated that the company has been receiving calls from OEMs (Original Equipment Manufacturers) inquiring about the impact of China’s latest move on supply security for batteries and other electronic equipment. He believes that China’s actions will encourage investors to raise money to expedite 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, anticipates that the import restrictions will “further boost the development of ex-China graphite activities.
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