The Race for Graphite: China’s Export Control Sparks Urgency for Global Miners
The recent move by China to impose export permits on certain graphite products has ignited a race against time for miners worldwide. With the next generation of electric vehicles (EVs) set to hit the market around 2025, securing a stable supply of key battery mineral graphite has become a top priority.
China’s Measures to Safeguard Supplies
China, the world’s leading graphite producer and exporter, refines over 90% of the material used in EV battery anodes. To protect its manufacturing dominance and ensure a steady supply of critical minerals, the country has implemented export controls on graphite products, citing national security concerns.
Challenges for Global Miners
While carmakers strive to stay ahead in the rapidly evolving EV industry, building mines to secure future supplies of battery inputs typically takes between five and ten years. As a result, China is expected to maintain its lead in supplying graphite for at least half a decade, leaving miners in other countries racing to catch up. This move by China sends a clear message to the West: they must find their own way to produce electric cars.
Accelerating Mining Projects
China’s unexpected export control measures have caught many sectors off guard, leading to concerns about potential future restrictions. As a result, end-users are now recognizing the urgency of improving domestic graphite supply. Several graphite miners outside of China are aligning themselves with carmakers, and the recent news is expected to expedite their plans to increase production capacity.
For example, Graphex Group is planning to open a graphite processing facility in Warren, Michigan, by the end of 2024. This facility aims to supply U.S. automakers with at least 10,000 metric tons per year of this crucial metal, which is the main component of EV batteries.
China’s Dominance in Critical Minerals
China’s dominance extends beyond graphite to other critical minerals such as refined cobalt, nickel, manganese, and rare earths. These minerals are essential for various industries, from lasers and military equipment to electric vehicles, wind turbines, and consumer electronics.
The Implications for Carmakers
China’s export controls on graphite have raised concerns among Original Equipment Manufacturers (OEMs) about the security of their battery and electronics equipment supply. The high cost and limited availability of alternative materials outside of China could result in increased vehicle prices or a reliance on Chinese battery manufacturers.
Paving the Way for Graphite Activities Outside of China
Despite the challenges posed by China’s export controls, the situation has created opportunities for graphite activities outside of the country. Mining companies like Northern Graphite and Tirupati Graphite are now receiving increased interest from investors, who recognize the need for alternative sources of graphite to ensure future supply security.
Overall, the race for graphite is on, as miners worldwide strive to secure supplies for the next generation of electric vehicles. China’s export controls have prompted urgent action, highlighting the importance of diversifying the global supply chain and reducing reliance on a single country.
