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Graphite demand outpaces EV sales

By 2035, graphite demand could by 8X 2022 mine production Critical Minerals Alliances 2023 - September 12, 2023

Every electric vehicle rolling off an assembly line increases the demand for graphite by an average of around 160 pounds. With more than 30 million EVs expected to hit global highways each year by 2030 and upwards of 45 million by 2045, the transition to e-mobility will require up to eight times more graphite than was mined globally during 2022.

While graphite has not received the attention of other EV battery ingredients such as cobalt, lithium, and nickel, this highly useful cousin to diamonds and coal is the single largest ingredient in lithium batteries. The reason for this is that while all the current EV battery technologies rely on some mixture of elements in the cathode (negative electrode), graphite does more than 90% of the heavy lifting on the anode (positive electrode) side.

"Increases in graphite demand will be predominantly driven by its use as the anode active material in batteries for EVs and stationary energy storage systems," the U.S. Department of Energy penned in its 2023 Critical Materials Assessment.

The demand for graphite is expected to outpace the number of new electric cars, trucks, vans, and SUVs hitting global highways as the nascent EV sector matures, according to Adamas Intelligence's biannual "State of Charge" report published in March.

The higher quantities of graphite per EV is due to automakers introducing fully electric versions of a wider range of vehicles, including SUVs, vans, and trucks, as well as vehicles with enough range to traverse North American highways, all of which require larger batteries and more graphite.

For example, the Tesla Model 3, which was the vanguard of the EV transition, has about 100 pounds of graphite in its batteries, whereas full-size SUVs like the GMC Hummer require roughly 500 lb of this anode ingredient.

Adamas Intelligence Managing Director Ryan Castilloux told Data Mine North that this trend toward bigger EV batteries with more graphite is anticipated to continue to rise disproportionally faster than total EV unit sales.

Up to 8X demand growth

Global analysts estimate that by 2030, it will take 5 to 6 million metric tons of graphite per year to fill lithium battery demands. This is roughly four times the 1.3 million metric tons mined globally, according to the U.S. Geological Survey's Mineral Commodities Summaries 2023.

In its highest demand projection, DOE forecasts that global graphite demand could be more than eight times current production by 2035.

"In 2035, flake graphite demand for energy applications will account for 91% of the total demand, and EV batteries will account for 74% of the total demand," the U.S. Energy Department inked in its Critical Materials Assessment.

Silicon and other materials could be used as lithium battery anodes, "but complete substitution is unlikely due to technological challenges and performance concerns," according to the DOE.

With no domestic graphite mines and only small startup graphite refining facilities, the U.S. remains largely dependent on imports from China, which currently produces more than 60% of the world's mined graphite and nearly 90% of advanced anode material.

This is why DOE ranks graphite near the top of its list of minerals critical to America's energy future.

During an opening address at the Battery Gigafactories USA 2023 conference in Washington, DC, Benchmark Mineral Intelligence CEO Simon Moores stressed the importance of developing domestic mining and refining of graphite.

"When you have a lock on the flake graphite you have a lock on the anode material," he explained.

North America can lock down a reliable, domestic supply of graphite with the large deposits of this battery material in the U.S. and Canada.

Largest US graphite source

A good portion of North America's flake graphite needs could be locked down at Graphite One Inc.'s Graphite Creek project on Alaska's west coast.

"The Graphite Creek graphite deposit, located in the Kigluaik Mountains 60 km north of Nome on the Seward Peninsula, Alaska, is the largest known flake graphite resource in the USA and is among the largest in the world," USGS penned in a report on the geology of this world-class deposit.

According to a calculation completed in early 2023, Graphite Creek hosts 37.6 million metric tons of measured and indicated resources averaging 5.15% (1.9 million metric tons) graphite; plus 243.7 million metric tons of inferred resource averaging 5.14% (12.3 million metric tons) graphite.

A 2022 prefeasibility study for Graphite One envisioned a vertically integrated graphite supply chain that includes a mine at Graphite Creek that would produce an average of 51,813 metric tons of graphite concentrate per year and a processing and recycling facility in Washington that would upgrade the concentrates into 49,600 metric tons of spherical coated graphite that serves as the anode material in lithium-ion batteries and 25,400 metric tons of other advanced graphite products per year.

The more than 14 million metric tons of graphite outlined in all resource categories is enough to support a mine of the size considered in the prefeasibility study for more than 200 years. As colossal as this deposit is, the resources outlined so far only account for about one-third of the roughly 10-mile-long graphite trend running across the property.

"The Graphite One project is in a league of its own, in terms of the scope of the resource in the ground in Alaska and the vision the company has for manufacturing anode materials and recycling batteries in Washington state," Sen. Lisa Murkowski, R-Alaska, said during a keynote address during an Arctic critical minerals summit held in Washington, DC.

Given that there are currently zero graphite mines in the U.S., North American automakers and the U.S. government want to see a Graphite One supply chain that better matches Graphite Creek's world-class potential with rocketing demand being driven by the transition to EVs powered by clean energy.

Pentagon invests in Graphite One

With the U.S. military leaning more heavily on lithium battery technologies, coupled with securing energy transition materials being a top White House priority, the U.S. Department of Defense announced in July that it is investing $37.5 million in the accelerated completion of a feasibility study for a larger Graphite One supply chain.

"This Department of Defense grant underscores our confidence in our strategy to build a 100% U.S.-based advanced graphite supply chain – from mining to refining to recycling," said Graphite One CEO Anthony Huston. "The U.S. simply cannot maintain a 21st century tech-driven economy without critical minerals like graphite."

The DOD backing for the all-American Graphite One supply chain follows a 2022 White House memorandum directing the Pentagon to utilize Defense Production Act Title III funding to support sustainable and responsible domestic production of strategic and critical minerals.

"The agreement with Graphite One (Alaska) advances the Defense Department's strategy for minerals and materials related to large-capacity batteries," Department of Defense Assistant Secretary for Industrial Base Policy Laura Taylor-Kale said in a mid-July statement on the $37.5 million DPA Title III award.

The DPA Title III funding awarded to Graphite One is half of the estimated $75 million needed to complete a feasibility study for this larger Graphite One supply chain.

ESG-forward graphite supply chain

In Canada, Nouveau Monde Graphite Inc. is also scaling up a globally significant graphite anode supply chain to help meet the demands in North America and Europe.

"NMG is positioning itself as North America's largest, fully integrated natural graphite production to relieve battery and EV manufacturers from their overreliance on Chinese production," said Nouveau Monde Graphite President and CEO Eric Desaulniers.

This mine-to-anode material supply chain in Quebec begins at Nouveau Monde's Matawinie mine project about 100 miles (160 kilometers) north of Montreal.

A feasibility study updated in July details plans for a mine at its Matawinie project that is expected to produce an average of 103,328 metric tons of high-purity flake graphite concentrate per year.

These concentrates will be trucked roughly 95 miles (150 kilometers) to the company's advanced material plant at Becancour, a region along the St. Lawrence River that has become known as "Lithium Valley" due to the numerous battery processing facilities being built there. Here the concentrates will be refined and upgraded to 42,616 metric tons of coated spherical anode material for lithium batteries and 3,007 metric tons of large flake graphite for other industrial purposes.

As a company focused on applying the highest ESG standards to producing an ingredient vital to the transition to green transportation and energy, Nouveau Monde has taken enormous strides in shrinking the carbon footprint of its Quebec operations.

"At every stage of development, management has worked to expand the field of possibilities for sustainability in our sector," said Nouveau Monde Graphite Chair Arne Frandsen.

This idyllic vision includes electric mining equipment charged with Quebec's abundant clean hydropower to do the digging and hauling at Matawinie. This idea is so ahead of the curve that the electric mining equipment it plans to use has not been invented yet.

Nouveau Monde and globally recognized mining equipment manufacturer Caterpillar Inc. forged a preliminary win-win electric mining equipment partnership in 2021.

This year, the two companies formalized this alliance with a definitive agreement for Caterpillar to supply Nouveau Monde with electric mining equipment. In turn, the junior mining company will supply the global heavy machinery manufacturer with graphite for the batteries of electrified versions of the famed Cat "yellow iron."

"This project is an exciting one as it highlights what is possible when an effective energy transition roadmap is implemented that bridges the traditional product line to an integrated, electrified site of the future," said Caterpillar President Denise Johnson.

Larger Quebec graphite potential

As Nouveau Monde builds an electrified graphite mine of the future at Matawinie, it is advancing toward the development of a much larger graphite operation at the world-class Lac Guéret deposit on Mason Graphite Inc.'s Uatnan project in Northern Quebec.

A road-accessible project about 175 miles (280 kilometers) north of the St. Lawrence River, Lac Guéret hosts 65.6 million metric tons of measured and indicated resources averaging 17.2% (11.2 million metric tons) graphite.

In mid-2022, Nouveau Monde entered into an option agreement to earn a 51% joint venture interest in this large and high-grade graphite deposit.

Early this year, Nouveau Monde and Mason unveiled a preliminary economic assessment that considers a mining operation at Uatnan that would produce roughly 500,000 metric tons of graphite concentrate annually for 24 years, making it one of the largest graphite projects being considered for development globally.

The world-class size of this operation is in step with the enormous graphite demand on the horizon.

"The Uatnan Mining Project aligns with our vision of progressive, integrated growth that caters to the market's requirements for high-quality graphite materials, local supplies, ESG-driven development, and large volumes to meet EV production levels," said Frandsen.

U.S. Gulf Coast graphite

Another North American graphite anode material supply chain is emerging in the Southeast U.S. Gulf Coast states of Louisiana and Alabama.

In Louisiana, Syrah Resources Ltd. has received major federal backing to scale up the production of battery-grade anode materials at its Vidalia plant.

In 2022, the DOE Loan Programs Office loaned Syrah $107 million to fund the expansion of Vidalia, which is currently at a scale to produce sample graphite anode material for automakers like Tesla Inc. and Ford Motor Company, both of which have offtake agreements for future supply.

"Projects like Syrah Vidalia are critical to our national security, our foreign policy, building our supply chain, and our economy," said DOE Loan Programs Office Director Jigar Shah.

Australia-based Syrah is expanding this graphite anode materials plant to 11,250 metric tons of annual capacity and plans to further expand the facility to 45,000 metric tons per year.

In addition to the loan, Syrah received a $219.8 million federal grant as part of $2.8 billion in awards by DOE for 20 projects to expand the domestic manufacturing of lithium battery materials.

This grant, along with roughly $225 million invested by Syrah, will go toward the expansion of the Vidalia graphite facility.

Feedstock for Vidalia will come from Syrah's Balama mine in Mozambique, which hosts 16.9 million metric tons of graphite in 110 million metric tons of reserves averaging 16% graphite. This is enough for the mine to supply 350,000 metric tons of raw graphite annually for more than 50 years.

In Alabama, Westwater Resources Inc. is putting the finishing touches on a phase-one processing plant that will use a proprietary process to upgrade raw graphite into 7,500 metric tons of battery-grade anode material per year.

At the onset, Westwater's Alabama Graphite Products subsidiary will import graphite as a feedstock for the refinery near the town of Kellyton, Ala. Westwater, however, intends to develop a mine at its Coosa project in the famed Alabama Graphite Belt.

According to a 2015 estimate, Coosa hosts 26 million short tons of indicated resource averaging 2.89% (754,000 tons) graphite and 97 million tons of inferred resource averaging 3.08% (3 million tons) graphite.

Westwater Resources Executive Chairman Terence Cryan said the company plans to leverage the Coosa deposit to establish an all-Alabama vertically integrated graphite supply chain capable of producing more than 40,000 metric tons of advanced anode material per year once the mine is in production and the second phase of the Kellyton processing plant is complete, both currently slated for 2028.

Combined with the Alaska-Washington and Quebec graphite supply chains, the emerging Gulf Coast states graphite hub is helping ensure North America has a lock on the anode material needed to charge the EV revolution.

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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