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EV revolution drives graphite demand

3 companies advance graphite anode projects in US, Canada Critical Minerals Alliances - September 2021

The global transition to electric vehicles plugged into renewable energy sources is powering enormous demand for graphite, the single largest ingredient in lithium-ion batteries.

"Graphite demand increases in both absolute and percentage terms since graphite is needed to build the anodes found in the most commonly deployed automotive, grid, and decentralized batteries," the World Bank penned in a 2020 report, "The Mineral Intensity of the Clean Energy Transition."

According to global lithium-ion battery experts at Benchmark Mineral Intelligence, a battery megafactory capable of producing 30 gigawatt-hours of annual capacity requires about 33,000 metric tons of graphite anode material per year.

When you extrapolate this out over the more than 200 battery megafactories that are being built or are in the pipeline, this equates to up to 5.4 million metric tons of battery-grade graphite anode material per year.

The International Energy Agency forecasts that the electric mobility and low-carbon energy sectors will demand 25 times more graphite per year by 2040 than today.

And this does not account for the traditional brake linings, lubricants, powdered metals, steelmaking, refractory, and other more traditional applications for this highly useful form of carbon.

According to "Mineral Commodity Summaries 2021," an annual report published by the United States Geological Survey, there are currently no graphite mines in the U.S., leaving American manufacturers reliant on imports for 41,000 metric tons of this industrial carbon allotrope.

China produced roughly 59% of the world's mined graphite during 2020. The next closest graphite producers were Mozambique (11%), Brazil (9%), and Madagascar (4%).

When it comes to battery-grade graphite anode material, which is flake graphite that has been rolled into potato-shaped spheres and coated in a hard carbon shell that must be thermally treated, China was the only commercial-scale producer in 2020.

"North America produced only 2% of the world's graphite supply with production in Canada and Mexico," USGS inked in its 2021 mineral commodities report. "No production of natural graphite was reported in the United States, but two companies were developing graphite projects – one in Alabama and one in Alaska."

Both these companies – Westwater Resources Inc. in Alabama and Graphite One Inc. in Alaska – have plans to develop both graphite mines and the processing facilities to produce the spherical graphite that serves as the anode material in most lithium-ion batteries.

In Canada, Nouveau Monde Graphite Inc. is making progress on a similar strategy to supply battery manufactures with graphite anode material from the mine and processing facilities it is developing in Quebec.

Alabama graphite

Alabama is rapidly emerging as a center for producing the advanced anode material needed by North American automakers.

Westwater plans to have a graphite processing plant operating in Alabama by the end of 2022 and begin mining fresh supplies of the battery material from the Yellowhammer State's famed Alabama Graphite Belt by 2028.

In June, Alabama Gov. Kay Ivey signed an incentive package that will provide Alabama Graphite Products, a subsidiary of Westwater, with $29.9 million in jobs and tax credits over 15 years, and $925,000 in job training and employee recruitment incentives for a facility that will produce the battery-grade graphite anode material needed for lithium-ion batteries.

"This plant not only will make Alabama the U.S. leader in graphite production, the go-to place for this important resource in battery manufacturing, it also will elevate our standing even more as a major player in the fast-growing electric vehicle sector," Ivey said. "We're home to four major auto plants, and the ability to source precious materials in-state for the lithium-ion batteries used in electric and hybrid vehicles will be a big plus in attracting other manufacturing jobs to the state."

Alabama Graphite's processing plant will initially produce approximately 7,500 tons of battery-grade graphite per year, and the company has plans to double this output.

The initial investment for this facility is expected to be at least $80 million, with another $44 million for the second phase.

Construction is expected to begin later this year, with the plant upgrading third-party graphite concentrates into high-value anode material by the end of 2022.

"Even though the raw graphite we will process into battery-grade material will be imported initially, none of it will be from China. We have secured agreements from other providers," said Westwater Resources President and CEO Chris Jones.

While the company has not named its providers, Syrah Resources Ltd. and its Balama mine in Mozambique would be a good fit.

With roughly 16.9 million metric tons of graphite hosted in 107.54 million metric tons of proven and probable reserves averaging 15.7% graphitic carbon, Balama is one of the world's most significant sources of graphite.

Some of the raw graphite mined at Balama is being shipped to Syrah's plant in Vidalia, Louisiana, where it is being upgraded into lithium-ion battery anode material.

Syrah's Vidalia facility has the capacity to produce 5,000 metric tons of unpurified spherical graphite and, with the installation of the furnace, upgrade 200 metric tons to active anode material.

While 200 metric tons per year of active anode material only represents a fraction of the current and forecasted needs in the U.S., it takes Syrah a step in the right direction and provides battery manufacturers a sample of the product to be commercially produced in Louisiana.

Whether or not Syrah is a provider of material for Westwater's Alabama Graphite plant, the Colorado-based miner plans to have an in-state source when it develops a mine at its Coosa project in the Alabama Graphite Belt.

According to a 2015 calculation, Coosa hosts 78.5 million metric tons of indicated resource averaging 2.39% (1.9 million metric tons) graphitic carbon; plus 79.4 million metric tons of inferred resource averaging 2.56% (2 million metric tons) graphitic carbon.

Vanadium, a critical metal emerging as an important ingredient in large redox flow batteries for storing renewable energy, has also been identified at Coosa. Westwater is evaluating this vanadium potential at Coosa ahead of developing a graphite mine there, which is expected to go into production in 2028.

"Whether it's mining or processing graphite, our company is committed to doing it in an environmentally safe, sustainable manner," said Jones. "The biggest virtue of electric vehicles and other battery-powered products is they reduce carbon emissions and are better for the environment. Producing the key materials for those batteries, we believe, can and should be done in an environmentally responsible way as well."

Zero-carbon graphite

Environmentally responsible graphite lies at the very heart of the graphite supply strategy being implemented by Nouveau Monde Graphite in Quebec.

"Nouveau Monde has committed to a zero-harm approach to producing advanced battery materials for decades to come. Carbon neutrality is an important part of this commitment," said Nouveau Monde Graphite Chairman Arne Frandsen. "We know that for many of our potential global clients, being able to purchase North American produced, high-quality carbon-neutral battery anode material, is of great importance. Nouveau Monde is determined to establish itself as one of the world's largest and most important sources of anode material for lithium-ion batteries."

A feasibility study completed in 2018 detailed plans for a mine at its Matawinie project in Quebec that would produce 100,000 metric tons of graphite concentrate annually over an initial 26-year mine life, based on 59.8 million metric tons of reserves averaging 4.35% graphite.

Nouveau Monde has since expanded the measured and indicated resources used as a basis for this study by 25%, suggesting the potential to extend the mine life, increase annual production, or both.

Flake graphite produced at a facility in the nearby town of Saint-Michel-des-Saints will be trucked roughly 100 miles (165 kilometers) to its advanced material plant at Bécancour, where it will be upgraded to the coated spherical graphite that serves as the anode material in most lithium-ion batteries.

The plant will initially be built to produce 45,000 metric tons of graphite anode per year, but the site is large enough to easily accommodate a 100,000-metric-ton-per-year plant in the future.

As a forward-looking company that is supplying a vital ingredient to the lithium-ion batteries storing renewable energy and powering electric vehicles, Nouveau Monde intends to shrink the carbon dioxide footprint of all its Quebec operations to net-zero.

To accomplish this, the graphite producer will power its operations with hydroelectric and will have an all-electric fleet of mining equipment at Matawinie. When operational, the all-electric mining fleet will result in 82% less direct emissions from mining.

While great strides have been made in recent years to develop all-electric underground mining equipment, not as much progress has been made on the surface mining trucks, loaders, excavators, and other equipment that will be needed at Matawinie.

To overcome this hurdle, Nouveau Monde signed a deal with Caterpillar Inc. to develop, test, and produce a fleet of all-electric Cat mining equipment for its coming graphite mine in Quebec – a landmark collaboration that will allow Nouveau Monde to achieve its lofty goals and advance technology that will provide surface mines around the globe an electric equipment option for reducing their carbon footprints.

"We are proud to be a driving force for our peers as we strive to electrify our operations to meet our carbon neutrality commitments while maintaining the productivity and efficiency standards of our mining operations," said Nouveau Monde Graphite President and CEO Eric Desaulniers. "Even more gratifying and important to our corporate mission is that our project can serve as a springboard for the future of the mining industry by collaborating with Caterpillar on these cutting-edge technologies."

As an added bonus for Nouveau Monde, each of the battery-powered Cat mining machines will need about a ton of graphite.

Desaulniers told Data Mine North that battery manufacturers interested in securing Nouveau Monde graphite have expressed interest in supplying Caterpillar with the batteries to power its electric machinery at Matawinie and around the globe.

Earlier this year, the company received a Quebec government environmental decree to begin developing a mine at its Matawinie project, and the company plans to start delivering the first carbon-neutral graphite in 2023.

Alaska graphite supply

While not quite as advanced, Graphite One's Graphite Creek project in Alaska is another project poised to deliver battery-grade graphite into North America's emerging EV and lithium-ion battery supply chain.

"With the growing demand for graphite in electric vehicle batteries and other energy storage applications – and recent actions by the Biden administration to secure U.S. supply chains for critical minerals – we see Graphite One's aim to produce a U.S.-based supply chain solution becoming increasingly significant as a new potential source of advanced graphite products for decades to come," said Graphite One CEO Anthony Huston.

This supply chain solution would begin with a mine at the world-class Graphite Creek project about 35 miles north of Nome, the famed gold mining town in western Alaska.

According to the most recent calculation, the Graphite Creek deposit hosts 10.95 million metric tons of measured and indicated resources averaging 7.8% (850,534 metric tons) graphitic carbon; and 91.89 million metric tons of inferred resource averaging 8% (7.34 million metric tons) graphitic carbon.

A 2017 preliminary economic assessment offered a first glimpse of a mine at Graphite Creek that would produce roughly 60,000 metric tons of 95% graphite concentrate per year and a processing facility to upgrade these annual concentrates into 41,850 metric tons of the coated spherical graphite and 13,500 metric tons of purified graphite powders annually.

A PFS slated for completion by the end of 2021 will provide a more detailed and definitive look at this potential Alaska segment of North America's rapidly expanding lithium-ion battery and EV supply chains.

"While the 2017 preliminary economic analysis indicated excellent economics, we are very excited about the potential for the PFS to show a clear path for further development," said Huston.

In preparation for the PFS, Graphite One's 2021 summer program focused on collecting the data needed for designing and permitting a mine at Graphite Creek.

This included infill drilling in preparation of upgrading resources to reserves with the completion of the PFS, geotechnical drilling at the proposed open pit mine and supporting infrastructure sites, as well as engineering and environmental baseline studies.

Graphite One is working diligently to ready the large Alaska battery materials project for permitting.

"We're working simultaneously to complete our PFS, and to generate additional data for our FS to further demonstrate the strong value proposition of our Graphite Creek deposit," Huston said.

Earlier this year, the U.S. Federal Permitting Improvement Steering Council (FPISC) designated Graphite Creek as a high-priority infrastructure project.

This designation means the world-class graphite project qualifies for Fast-41 – short for Title 41 of the Fixing America's Surface Transportation Act – a program established by the Obama administration to improve the timeliness, predictability, and transparency of federal environmental review and authorization process for domestic infrastructure projects.

FPISC is an independent federal entity created to coordinate the permitting of eligible Fast-41 projects across different federal agencies, thereby streamlining and shortening the overall process for large infrastructure projects that are eligible for the program.

In January, FPISC informed Graphite One that its Alaska project "clearly qualifies" as a Fast-41 project.

"We see the fact that our project qualifies under the FPISC's Renewable Energy and Manufacturing sectors as recognition of graphite as essential to a sustainable U.S. infrastructure supply chain," said Huston.

Author Bio

Shane Lasley, Publisher

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Over his more than 16 years of covering mining and mineral exploration, Shane has become renowned for his ability to report on the sector in a way that is technically sound enough to inform industry insiders while being easy to understand by a wider audience.


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