Graphite has seen a massive turnaround in the past two years, going from a market flooded by Chinese dominance, to becoming a highly marketable processed commodity that will be a key ingredient for new breakthroughs in materials technology.
The high-tech material graphene is the thinnest substance known to man at a single carbon atom thickness, and is up to 20 times stronger than steel while being lightweight, highly conductive, and flexible.
However, Lincoln Minerals managing director Dr John Parker says the development of graphene technology will take some time before it becomes a profitable product.
“Bulk usage of graphene is a long way off, a few kilos goes a long way today,” he said.
“That’s not going to be a company maker just yet, but spherical graphite is the key here.”
Spherical graphite is a high purity milled product of around 20 microns, used for the production of lithium ion batteries (used for everything from mobile phones to electric cars) which sells for around $3500 per tonne, and will be the core business of the Australian graphite industry, Parker said.
A new report from the South Australian government has shown demand for large to jumbo flake graphite required for such products will continue to grow, and with 60 per cent of the nation’s known graphite resources in South Australia (1.47 million tonnes), local graphite explorers will be well positioned to take advantage of that market.
Global graphite demand was estimated at around 1250kt in 2014 (US Geological Survey), and this has been forecast to grow to 3500kt by 2035, most for the electric car battery market, which requires 10-15 times more graphite than lithium.
Valence Industries has already leapt to the call, having re-developed the mothballed Uley Graphite Mine on the Eyre Peninsula, currently the only producing graphite mine in Australia.
Valence CEO Chris Darby recently revealed the company has plans to expand not only to a new open pit, but also to invest in the processing, purifying and packaging capability to increase the value of the product.
At time of writing Valence was extremely close to finalising a $50 million finance deal which would allow them to ‘value add’ to their graphite products, to go from an average sale price of US$1400 per tonne to around US$3800 per tonne.
One of the most interesting features of the graphite pricing system is that because of the large number of types of products, prices are negotiated on an individual contract basis rather than a global market price.
“There isn’t a commodity price, you need one-on-one sales contracts with the customers,” Darby said.
“US$1400 is our weighted average across about 200 different potential products.”
Valence process the graphite using specialist blending of sizes and particle distribution, as well as specialist packaging for end users, effecting advanced materials handling systems.
“Then we add to that what we call our advanced manufacturing program, which is a further refining and purification of the graphite product which increases our purity levels from 90-98 per cent purity up to 99.5-99.95 per cent purity levels.”
Although there is a common idea in the industry that only large to jumbo flake graphite is suitable for producing power storage batteries for electric cars, Darby said this is not necessarily true.
“A range of different types of graphite can be used in different types of batteries,” Darby said.
“When looking at the next generation of batteries, while a proportion of the concern about having large flake graphite is correct, the other real concern is that you mustn’t have things that can destroy the batteries, you need low associated impurity levels.”
“It’s a combination of flake size and purity level: We have naturally very low level of impurities, and also an absence of the particular types of impurities that are bad for batteries, which places us very strongly within the battery market, not just in the lithium ion space but also in the energy storage market segment.”
Darby said the beauty of the South Australian resources is that they offer unique and even unprecedented levels of purity in the ground, up to 62 per cent Total Graphitic Content (TGC).
The Uley JORC resource is 3.21Mt at 11.54% per cent TGC, for a total graphite resource of 370,866 tonnes.
Lincoln Minerals are next in line to open fresh graphite production, with a mining lease application in process for the Kookaburra Gully resource, JORC 2.2Mt at 15.1 per cent TGC, for a total resource of 332,000 tonnes.
Kookaburra is expected to receive approval by September/October, with environmental clearances expected to take another three months before production.
Archer Exploration are following about six months behind for development of the Eyre Penninsula resources, a substantially larger JORC resource with 8.55Mt at 9.0 per cent TGC for 770,800 tonnes of graphite.