Graphite is an important material for the electric vehicle battery industry. What are the top graphite-producing countries?
Graphite is an excellent conductor of heat and electricity and also has the highest strength of any natural material. However, it wasn’t until recently that the metal began to gain popularity.
Interest in graphite mining is increasing in large part because lithium-ion batteries are becoming more and more common. These batteries are used in everything from phones to electric vehicles, and graphite is one of their key raw materials. As lithium ion battery demand continues to increase, graphite demand is expected to rise at least in the next few years.
In fact, despite discussions surrounding changes in li-ion battery chemistry, many experts think graphite will remain a key raw material in electric vehicles batteries for at least the next decade. Both synthetic graphite and natural graphite, in the form of the intermediate product spherical graphite, are graphite products used in the anodes of lithium-ion batteries.
According to Benchmark Mineral Intelligence, demand for graphite from the battery anode segment could increase by seven times in the next decade, as the surge in electric car sales and the emergence of energy storage continues to drive the construction of lithium-ion battery megafactories.
In terms of graphite prices, supply constraints paired with increasing demand from the battery sector have helped natural graphite prices in the past few years despite several rounds of downward graphite prices readjustments as plants reopened, according to Roskill.
“The important point, however, is that the market structure is not the same across all flake graphite grades. There are still parts of the market that will be tight into H2, such as large flake material for use in expandable graphite processing,” Benchmark Mineral Intelligence Head of Price Assessments Andrew Miller told the Investing News Network.
Looking over to supply in 2019, China took the top spot for graphite production, with Mozambique and Brazil coming in second and third, respectively. For any investor following the sector it comes as no surprise that the Asian country is leading the way. China dominates both the mining and refining side of the flake graphite to anode supply chain.
Here’s a look at which countries produce the most natural graphite. All stats are based on the most recent data from the US Geological Survey.
Mine production: 650,000 MT
As mentioned, China was the world’s largest graphite producer in 2020. It put out 650,000 metric tons (MT) of the metal, almost the same amount it produced the previous two years. According to the US Geological Survey, the country accounted for 62 percent of world graphite mining in 2020.
Despite China’s stranglehold on the graphite market, investors shouldn’t necessarily expect the Asian nation’s dominance to continue forever. That’s because in recent years the graphite-mining country has made an effort to streamline production. Part of that process has been taking polluting producers offline, and there have also been plant closures in Shandong, China, due to environmental targets. These may further impact Chinese graphite production going forward.
Mine production: 120,000 MT
Mozambique has made huge gains in graphite production over the past few years, with 2020 output clocking in at 120,000 MT. The country is home to two main graphite miners: Syrah Resources (ASX:SYR,OTC Pink:SYAAF) and Triton Minerals (ASX:TON).
The US Geological Survey states, “A graphite mine project in Mozambique commenced operations at the start of 2018 and was ramping up production during 2018 and 2019 at a high-grade graphite deposit, which was reportedly the largest natural graphite mine globally. The mine cut back production during 2019 in an effort to stabilize graphite prices. The mine is expected to operate for 50 years.”
Mine production: 95,000 MT
Brazil became the world’s third largest graphite producer in 2020. With 95,000 MT of output last year, it came in significantly behind China. Brazil’s 2020 graphite-mining output decreased by 1,000 MT from 2019.
Little information is available about the Brazilian graphite-mining industry, as the country’s top producers of the metal are private. However, ETF.com does state that the country’s two largest graphite producers are Extrativa Metalquimica and Nacional de Grafite.
Mine production: 47,000 MT
Madagascar produced much less graphite than the top three graphite-producing countries in 2020, but it’s still the world’s fourth largest producer of the metal. According to US Geological Survey, some mines in Madagascar began ramping up production in 2018, while additional large graphite deposits are currently under development in the East African nation.
Mine production: 34,000 MT
India’s total output last year came to 34,000 MT, slightly lower than the amount it put out in 2019. The country’s graphite reserves vary widely from state to state, with Arunachal Pradesh holding nearly half of India’s graphite reserves.
The graphite-mining country has eight main producers, including Tirupati Carbon & Graphite, Chotanagpur Graphite Industries and Carbon & Graphite Products. HEG (NSE:HEG) is a small graphite electrode producer in India that made headlines for record profit in 2018.
Mine production: 24,000 MT
In 2020, Russia’s graphite output clocked in at 24,000 MT, just a tad down from 25,100 MT in 2019. Despite this plateau, the country expects to significantly increase its production during the next several years due to the implementation of two investment projects, Dalgrafit and Uralgraphite. As with many of the countries on this list, little further information is available on graphite mining in Russia.
Mine production: 19,000 MT
The Ukraine produced 19,000 MT of graphite in 2020, lower than 2019’s 20,000 MT. Zavalyevskiy Graphite is a large producer in the Ukraine. According to its website, it’s been in operation since 1934 and produces up to 30,000 tonnes of natural flake graphite per year.
Mine production: 15,000 MT
Norway’s graphite-mining output was almost flat from 2019 to 2020, going from 16,000 MT to 15,000 MT. All graphite deposits in the country contain flake graphite and are generally low tonnage. That said, many are in favorable locations — for example, close to the sea or to the electrical grid.
Mine production: 13,000 MT
Pakistan comes in at ninth place for graphite production. The country produced 13,000 MT of graphite in 2020, which slightly less than the previous year. Despite the country’s production numbers, information on graphite mining in Pakistan is scarce.
Mine production: 10,000 MT
Canada’s graphite production fell slightly in 2020, coming in at 10,000 MT. Interest in Canada as a potential source of graphite has been rising for the past few years, particularly since Tesla (NASDAQ:TSLA) said that it plans to source the lithium, graphite and cobalt it needs for its Nevada-based lithium-ion battery gigafactory from North America.
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Securities Disclosure: I, Melissa Pistilli, hold no direct investment interest in any company mentioned in this article.