The study, published just a day after the United Nations warned the world is falling “miles short” of what’s needed to curb devastating global warming, indicates that an investment of $78 trillion will be needed to change this course and achieve net-zero emissions by 2050.

Under the 2015 Paris Agreement, nations committed to limiting global warming to “well below” two degrees Celsius above the average temperatures recorded between 1850 and 1900, aiming for a target of 1.5 degrees Celsius if feasible. Efforts to date have not succeeded in meeting this challenge, the annual “Energy Transition Outlook” from Wood Mackenzie shows.

Unlike the UN pessimistic outlook, the Scottish consultancy believes that while major obstacles hinder short-term targets, particularly for 2030, a 2050 net-zero goal remains feasible. Immediate and coordinated global action would be necessary, WoodMac warns.

Threats to climate progress

A series of global crises, including the Russia-Ukraine conflict, escalating Middle East violence, rising populism in Europe and global trade tensions with China, are undermining the pace of the energy transition, Wood Mackenzie’s vice president head of scenarios and technologies, Prakash Sharma, said. 

He explains that without urgent policy changes and enhanced investment, a warming trajectory of 2.5˚C to 3˚C could become inevitable.

“We are under no illusion as to how challenging the net zero transition will be, given the fact that fossil fuels are widely available, cost-competitive and deeply embedded in today’s complex energy system,” Sharma added. “A price on carbon maybe the most effective way to drive emissions reduction but it’s hard to see it coming together in a polarized environment.”

Key investment are needed across several critical areas, according to WoodMac. As renewable energy sources grow, substantial upgrades to power supply and grid infrastructure are essential to meet the growing demand. Additionally, the need for critical minerals, such as lithium, nickel and cobalt, is projected to increase five- to ten-fold by 2050, as demand for batteries and other technologies essential for the energy transition continues to grow. 

WoodMac sees the need to back the development of emerging technologies, including carbon capture, low-carbon hydrogen, and nuclear power, are vital for facilitating the shift towards cleaner energy sources.

Securing this funding won’t be easy, the consultants noted. “Doubling annual investments to $3.5 trillion by 2050 will be necessary in our net zero scenario,” Sharma said, adding that it will require unprecedented policy coordination globally.

The role of electrification

The electrification of energy systems will play a pivotal role in decarbonization. Transitioning from fossil fuels to electric power, Wood Mackenzie forecasts that electricity’s share of global energy demand will increase from 23% to 35% by 2050 in a base case, and could reach as high as 55% in a net-zero scenario.

Wood Mackenzie’s analysis reveals that global energy demand is set to rise by 14% by 2050. Emerging economies are projected to see even steeper growth at 45%, driven by rising populations and economic advancement. 

In parallel, data centres, electric vehicles, and AI are emerging as new drivers of electricity consumption, with AI-related energy use alone expected to increase from 500 TWh in 2023 to up to 4,500 TWh by 2050.

Including renewable energy source to meet electrifications demand could help reduce emissions, the report says.

According to Wood Mackenzie, solar and wind currently account for 17% of the global power supply, and renewables capacity is expected to double by 2030 in its base case. Yet, this increase still falls short of the COP28 commitment made in 2023 to triple renewables by 2030.

Transition or coexistence?

While nuclear energy holds promise for providing consistent, zero-carbon electricity, its high cost and frequent project delays pose significant challenges. WoodMac says that nuclear power could play a more significant role as it has attracted interest, particularly from tech companies looking to power data centres sustainably.

While fossil fuels is expected to plateau in the 2040s before beginning a gradual decline, Wood Mackenzie predicts that the high capital costs of low-carbon technologies coupled with strong demand for energy, will require the continued use of oil and gas in the near term.

Wood Mackenzie says to meet climate targets there will be necessary that nations gathered at the COP29 meeting in Azerbaijan next month finalize Article 6 of the Paris Agreement. This section focuses on carbon markets and aims to establish a new climate finance goal to replace the previous annual target of $100 billion, which experts consider insufficient.

The consultancy’s report echoes concerns included in a UN Environment Programme (UNEP) study released last week. The document says the next decade is crucial in the battle against climate change, adding that failing to act now will jeopardize any chance of limiting global warming to 1.5 degrees Celsius. According to the UN body, the current rate of climate action could lead to a catastrophic increase of 3.1 degrees Celsius this century. 

“Either leaders bridge the emissions gap, or we plunge headlong into climate disaster, with the poorest and most vulnerable suffering the most,” Secretary General Antonio Guterres warned.

Even if all existing commitments to reduce emissions are fulfilled, global temperatures would still rise by 2.6 degrees Celsius above pre-industrial levels, experts agree.

Importers of lithium, graphite and cobalt for use in manufacturing in the UK will be granted access to UK Export Finance, a state body that usually helps British exporters and their buyers with financing and insurance, people familiar with the matter said. They will only be eligible for the support if they hold long-term contracts with UK exporters, a move that will benefit the defense, aerospace, electric vehicle and renewable energy industries, they said, asking not to be named discussing measures to be announced in the Oct. 30 budget.

Western countries in recent years have been stepping up efforts to secure supplies of critical minerals that are crucial to advanced manufacturing but are currently dominated by China. Reeves’s initiative next week will make it easier for UKEF to secure finance contracts for suppliers in Commonwealth countries who have large mineral deposits, such as Australia, the people said. Prime Minister Keir Starmer is holding a series of bilateral meetings on trade and economic growth at the Commonwealth heads of government meeting in Samoa this week.

Reeves is preparing to unveil a package of tax rises and further borrowing in Labour’s first budget in 14 years. She’s seeking to raise some £40 billion ($52 billion) to help fund party priorities like the National Health Service and to plug a fiscal void that she blames on her Conservative predecessors. Reeves has also been debating changing the measure of debt used to inform the country’s fiscal rules, freeing up as much as an extra £50 billion of government spending on infrastructure.

While the government didn’t specify which companies it expects the move on export finance to benefit, manufacturers such as jet engine maker Rolls Royce Holdings Plc are significant users of imported metals, and Indian firm Tata Motors Ltd. is building a battery plant in southwest England that will require lithium supplies.

Labour is also relying on attracting on an influx of private investment into the UK to get the economy firing and spur the growth needed to generate more tax income. The government said it drummed up £63 billion at its international investment summit earlier this month, though some of that had previously been committed.

On Friday in Samoa, Starmer unveiled an additional £1 billion investment in the UK property market by Aware Super, an Australian fund and Delancey Real Estate. AustralianSuper, the country’s biggest pension fund, is also preparing to bolster its international investment team in London, expecting to manage £250 billion from its London office by 2035, the UK government said in a statement.

Starmer hosted a business meeting with AustralianSuper chief executive Paul Schroder, Bank of America chair Brian Moynihan and Lloyd’s of London CEO John Neal in Samoa on Thursday.

(By Ellen Milligan)

In combined battery capacity deployed – a better indicator of battery materials demand than unit sales alone – the global electric car market expanded by 22% so far this year. 

In total, 505.6 GWh of fresh battery power hit the globe’s roads from January through August, according to data from Toronto-based EV supply chain research firm Adamas Intelligence.

The robust growth rate also comes despite a noticeable swing towards hybrid vehicles, which have inherently smaller batteries and therefore contained metal. 

The combined battery capacity of plug-in hybrid vehicles steered onto roads globally for the first time this year is up 70% versus a must more sedate pace for full electric passenger vehicles of 15%. At the same time the average battery capacity of plug-ins is also rising, up 14% this year to 23kWh, more than a third of the average full electric vehicle.

For miners supplying the EV battery industry, the news remain negative: when pairing metals demand with prices in the supply chain, declines this year are brutal. 

The latest data based on EV registrations in over 110 countries show the sales weighted average monthly dollar value of the lithium, nickel, cobalt, manganese and graphite contained in the batteries​​ of the average EV based on global end-user registrations, battery capacity and chemistries.

Put it all together and the raw materials bill for the average EV is now down to $537 compared to $1,342 in August 2023 and a monthly peak of more than $1,900 at the beginning of last year, according to Adamas Intelligence analysis.      

The downtrend is led by lithium where the sales weighted average value per EV is down 75% over the past year to $236 and cobalt, which at little over $46 is 42% below the value reached in August 2023. Manganese is the only battery raw material in positive territory this year, up 3% but the raw material is also down 8% compare to the same month last year. For anode material, graphite loadings and values have held mostly steady at just under $26 per average EV.

The value of nickel in the average EV battery is down 26% as LFP battery chemistries continue to take global markets. LFP batteries represented 42% of the global total in terms of capacity deployed in GWh in August.

That compares to a 32% share during the same month last year, more than offsetting the long-running trend towards high-nickel cathodes, and the growing popularity of NCM batteries for larger plug-in and range-extending hybrids, where the energy density of nickel-based cathodes makes more sense given the weight of these vehicles. 

For a fuller analysis of the battery metals market check out the latest Northern Miner print and digital editions. 

* Frik Els is Editor at Large for MINING.COM and Head of Adamas Inside, providing news and analysis based on Adamas Intelligence data.

The company said it had exported full container loads of high-quality, coarse flake graphite concentrate from the Port of Tulear, Madagascar, to be used in high-value graphite products. These include refractory materials and graphite foils for consumer electronics and fire-retardant applications. 

The shipments mark an important milestone for NextSource as it establishes itself as a supplier of critical materials to global markets and a contributor to economic development in Madagascar, chief executive officer Craig Scherba said in a statement.

The Molo mine entered production a year ago and now produces NextSource’s SuperFlake, which is the registered trademark for the company’s graphite concentrate. The product is known for its high carbon purity of up to 98% across all flake size distributions with simple flotation alone. It can be upgraded to 99.97% battery grade purity.

The operation currently produces concentrate at a capacity of 17,000 tonnes per annum (tpa) and the company has already proposed an expansion that would increase output by nearly nine times to 150,000 tpa.

NextSource has also outlined its future plans to become a vertically integrated global supplier of graphite anode material. It aims to construct multiple battery anode facilities (BAFs) in key jurisdictions, capable of producing coated spherical purified graphite (CSPG) at commercial scale. 

This strategic move aligns with the increasing demand for graphite in battery production for electric vehicles and energy storage systems.

• Stockpiling. The Trump Administration supported and the Harris campaign supports increased mineral stockpiling. According to the Department of Defense, the National Defense Stockpile (NDS), as of March 2023, only had inventories to cover 6 percent of the US military’s and essential civilian demand’s estimated material shortfalls in a hypothetical one-year conflict with China, followed by a three-year recovery. The president could tap the NDS Transaction Fund for mineral stockpiling, as well as the Defense Production Act (DPA) fund. The Eisenhower Administration used DPA funds for mineral stockpiling during the Cold War, and the president still has this authority (50 USC §4533). Importantly, the next administration’s Department of Defense should prioritize stockpiling minerals extracted and processed in the United States.

• Subsidies. The Trump Administration supported and the Harris campaign supports subsidies for critical mineral projects. The Trump Administration deemed critical mineral processing projects eligible for direct loans under the Advanced Technology Vehicle Manufacturing (ATVM) program, and the Biden-Harris Administration has loaned to such projects. The next administration’s Department of Energy could also deem mining projects eligible under the ATVM program by issuing a draft rule that adds “mining” to 10 CFR 611.2 “Eligible Project” (3). To specifically lower costs for US mineral processing facilities, the next administration’s Internal Revenue Service could propose new regulations extending the production costs covered by the Section 45X 10-percent production tax credit to feedstock acquisition, as has been urged by several organizations and mining companies.

• Procurement. Both the Trump and Biden-Harris administrations support increased domestic content requirements for government procurement. Under the authority of Executive Order 14005, the next administration’s Federal Acquisition Regulatory Council could issue a draft rule that adds a new part to the Federal Acquisition Regulations, requiring that acquisitions of specified clean energy technologies contain a certain threshold percentage of minerals extracted in the United States. For example, the draft rule could ultimately require that the General Services Administration—the federal government’s main source for procuring non-tactical vehicles—only acquire electric vehicles with batteries containing a high percentage of chemicals derived from US-extracted minerals. The next administration’s US Postal Service could adopt a similar content requirement in its Supplying Principles and Practices for electric vehicle acquisitions.

• Tariffs. Trump has pledged significant tariff increases, while the Biden-Harris Administration increased tariffs on several minerals imported from China. Domestic mineral projects like South32’s Hermosa manganese-zinc project support such trade protections to reduce US reliance on foreign minerals. The next president could (likely) impose tariffs on any mineral imports immediately under the International Emergency Economic Powers Act (IEEPA). The only prerequisite is a national emergency declaration, like the now-expired critical minerals executive order. If concerned about the legality of levying tariffs under IEEPA, the president could also direct the secretary of commerce to open a Section 232 investigation into mineral imports, although the tariff imposition would likely take several months to occur.

• Permitting. Both Trump and Harris support expedited permitting for building major projects. Previously, most US mining projects required Clean Water Act section 404 permits—which trigger the National Environmental Policy Act—but the Supreme Court’s decision in Sackett v. Environmental Protection Agency (2023) circumscribed the areas requiring these permits, possibly lowering the permitting requirements for many mine projects. Determining whether a project requires a section 404 permit, however, can take up to one year based on the district. To expedite this process, the next administration’s US Army Corps of Engineers could issue a regulatory guidance letter directing district engineers to prioritize the review of approved jurisdictional determinations for sites of potential mining projects.

In short, the next president’s administration has significant unilateral authority to support US mining of critical minerals. First, it could increase mineral stockpiling by tapping both the NDS Transaction Fund and DPA fund for mineral acquisitions.

The next administration could also expand existing subsidies—like the ATVM direct loan program—to mining projects. For government acquisitions of clean energy technologies, it could set content requirements for US-extracted minerals.

The next administration could, additionally, impose tariffs on mineral imports of their choosing by issuing a national emergency declaration concerning mineral imports under IEEPA.

Lastly, it could expedite permitting by prioritizing jurisdictional determinations for sites of potential mining projects. On January 20, 2025, the next US president could—and should—take these actions to bolster US mining of critical minerals.

** Gregory Wischer is the founder of Dei Gratia Minerals, a critical minerals consulting firm.

The company is moving up a planned two-month shutdown to start on Nov. 2 to install capacity for 25,000 tonnes a year from around 10,000 to 15,000 tonnes a year currently, the company said on Monday.

“In order to ensure increased, stable production in 2025 and beyond that can keep up with rising market demand, we have decided to move forward the timeframe for a maintenance and repair shutdown,” CEO Hugues Jacquemin said in a release.

“Lac des Iles has the potential to produce more and for longer than anticipated when we acquired the mine in 2022,” he said. “We need to prepare as we look to open a new pit and increase throughput at the mill.”

China’s, the leading producer of graphite used in electric vehicle batteries, said in November last year it was curbing exports of the material. The Asian giant produces and processes most of the world’s graphite supplies.

Shares in Northern Graphite fell 4% on Monday afternoon to C$0.11 apiece, valuing the company at C$13.8 million.

Every day operation

The restart is planned for Jan. 6. During the closure, Northern will supply customers from inventories and from third parties, it said. The Lac-des-Iles mine, the company’s cornerstone asset, is located about 140 km north of Ottawa.

Northern Graphite began operating the plant seven days a week in April, a move that boosted output by 59%. But the company encountered a financial hit when markets knocked the battery metal’s price lower.

The company plans to open a new pit by early in 2025 and lengthen the mine’s life by eight years. It has planned drilling this year aimed at expanding resources and reducing the strip ratio.

The mine has 3 million indicated tonnes at an average grade of 6.4% graphitic carbon (Cg), containing around 213,000 tonnes of Cg, according to a resource estimate. It has 1.4 million inferred tonnes averaging 7.4% Cg.

Earlier this month the company announced a partnership with Rain Carbon, a Hamilton, Ontario-based chemical producer, to develop and commercialize advanced battery anode material.

The funding, if approved, would be made through the EXIM’s “Make More in America” and “China and Transformational Exports Program” (CTEP) initiatives, which are designed to strengthen sectors that are critical to US national security and help US exporters facing competition from China, respectively.

Graphite represents a key battery anode material and one of only four critical minerals highlighted by the US Geological Survey as essential to all six industrial sectors. Despite its importance, the US has no domestic production of graphite and is therefore 100% dependent on imports.

S&P Global estimates that the country imports nearly half of its supply from China, its main rival and the dominant player in the global graphite supply chain, accounting for 77% of the world’s mine production.

Graphite One’s strategy

Vancouver-based Graphite One is positioned to mitigate China’s dominance by developing an advanced graphite supply chain that is vertically integrated and completely US-based. Its proposed project is anchored by what it considers to be the nation’s largest and highest-grade graphite deposit, Graphite Creek in Alaska, supplemented by an anode active materials (AAM) manufacturing plant located in Ohio.

A 2022 prefeasibility study projected that the entire operation would produce 75,026 tonnes of advanced graphite products per year over a 26-year life. The project has a post-tax net present value of $1.36 billion before accounting for tax credits enacted by the US Inflation Reduction Act.

The PFS assumes that the AAM manufacturing site will initially use purchased synthetic graphite, then incorporating natural graphite material once the Graphite Creek mine enters production. For the AAM plant, the company has already secured a 50-year lease agreement, including an option to purchase the property once known as Warren Depot, which was part of the National Defense Stockpile infrastructure the last time the US mined graphite.

US backings

In a letter of interest dated Oct. 18, the EXIM states that it is in support of the proposed capital funding plan by Graphite One for the AAM manufacturing facility located in Ohio’s Voltage Valley, which is expected to cost $435 million for the initial phase.

“Based on the preliminary information submitted regarding expected US exports and US jobs supported by this project, EXIM may be able to consider potential financing of up to $325 million of the project’s costs with a repayment tenor of 15 years under EXIM’s ‘Make More in America’ initiative,” the EXIM stated in its letter.

Construction of the facility is expected to commence within three years. While the site’s existing power lines are sufficient for Phase 1 production target of 25,000 tonnes per year of battery-ready anode material, an expansion into the Warren Depot site could accommodate 100,000 tonnes of production annually.

“EXIM’s potential financing, following on G1’s two Department of Defense grants under the Defense Production Act and from the Defense Logistics Agency, underscores the urgent need to bring US graphite supply into production, and end the nation’s 100% foreign dependency,” commented Anthony Huston, CEO of Graphite One.

The EXIM has also indicated that the financing may be eligible for for opportunities under the CTEP initiative, given China’s dominance in graphite.

Upon receiving EXIM’s letter, Graphite One intends to submit a formal application in 2025, after which the EXIM will conduct all requisite due diligence before making a final financing commitment.

The company also intends to make a production decision on its graphite project upon completion of its feasibility study, which is expected in the first quarter of 2025.

The European Union is looking at ways to reduce its reliance on imports of materials that are critical for the bloc’s energy transition.

Graphene, whose powder has a high electrical and thermal conductivity, can be used to increase the storage capacity of lithium-ion batteries, BeDimensional said.

The material made of a single layer of carbon atoms is also key to developing lubricants free of metal-based additives.

BeDimensional will on Friday inaugurate a production plant in the Italian city of Genoa with a capacity of over three tonnes a year of graphene and other super-thin crystals.

The firm plans to increase its capacity to over 30 tonnes annually by 2028 thanks to the establishment of an additional production plant that will be partly funded via a 20 million euro ($21.7 million) loan granted by the EIB.

BeDimensional’s current shareholders – which also include the venture capital arm of Italian energy group Eni and Italian state lender CDP – will provide an additional 5 million euros to support the group’s development plans.

Born as a spin-off of the Italian Institute of Technology (IIT), BeDimensional also produces a super-thin boron nitride powder which is anti-corrosive and is an electrical insulator that can be added to textiles and leather.

($1 = 0.9228 euros)

(By Elvira Pollina and Francesca Landini; Editing by Keith Weir)

Amnesty International points out that human rights risks in supply chains include potentially leaving communities exposed to exploitation, health risks and environmental harm caused by the rapid expansion of mines required for the metals used in batteries.

In the new report, Recharge for Rights: Ranking the Human Rights Due Diligence Reporting of Leading Electric Vehicle Makers, Amnesty International uses criteria based on international standards to comprehensively assess human rights due diligence policies and self-reported practices of 13 major EV manufacturers, issuing each one with a scorecard.

The companies were assessed against criteria based on internationally recognized frameworks, including the UN Guiding Principles on Business and Human Rights (UNGPs), the OECD Guidelines for Multinational Enterprises, and the OECD Due Diligence Guidance for Responsible Business Conduct.

Mixed scores across the board

Amnesty’s scorecard, which is marked out of 90, assesses companies’ performance on criteria including commitment to human rights policies, risk identification process, supply chain mapping and reporting, and remediation.

The scorecard breaks down whether these car brands are meeting their human rights responsibilities and highlights which of them are failing to show that they are addressing human rights concerns.

Companies assessed are headquartered in China (BYD, Geely Auto), France (Renault), Germany (BMW, Mercedes-Benz, VW Group), Japan (Mitsubishi, Nissan), Netherlands (Stellantis), South Korea (Hyundai) and the United States (Ford, General Motors, Tesla).

None of the companies scored higher than 51 on Amnesty International’s human rights due diligence assessment, it said.

Mercedes-Benz ranked the highest (51) Tesla came in second (49) and Stellantis third (42) . BYD scored the lowest, (11), followed by Mitsubishi (13) and Hyundai (21).

Lacking transparency

In terms of supply chain mapping disclosures, BYD, Geely Auto, Hyundai, General Motors and Mitsubishi Motors scored the lowest, failing to provide detailed information about their supply chains, Amnesty International said.

The report revealed BYD does not disclose smelter, refiner, or mine site names. Geely Auto provided only general supplier locations without specifying mineral extraction sites.

Hyundai and Mitsubishi Motors demonstrated a similar lack of transparency, Amnesty International said, with no evidence of comprehensive supply chain mapping or mine site identification for cobalt, copper, lithium and nickel, making it difficult for stakeholders to verify how these operations affect nearby communities.

As global demand for battery minerals soars, the report calls for car makers to identify and mitigate human rights risks and as well as risks of abuse of Indigenous Peoples’ rights in countries where minerals are extracted such as the Democratic Republic of Congo and Philippines.

“The huge rise in demand for the metals needed to make electric vehicle batteries is putting immense pressures on mining-affected communities,” Amnesty International’s Secretary General, Agnès Callamard, said in a media statement.

“The human rights abuses tied to the extraction of energy transition minerals are alarming and pervasive and the industry’s response is sorely lacking. Communities are suffering from forced evictions, health issues caused by pollution and difficulties accessing water,” Callamard said.

“As demand for electric vehicles increases, manufacturers must ensure people’s human rights are respected.”

Read the full report here.

Their innovation will address the stability gap between natural and synthetic graphite, and boost usage of natural graphite in electric vehicles, Northern Graphite said.

The joint development agreement follows the launch of Northern’s Battery Material Group (BMG) in August. This included the acquisition of a carbon and battery laboratory in Germany. The lab can both produce BAM from the company’s Lac des Iles mine in Quebec and is capable of building lithium-ion batteries with longer life cycle, driving range, and charging speed.

Rain’s Innovation Centre in Hamilton, Ontario, is a 2,790-m² development facility that includes demonstrations plants for pilot-scale processing of carbon and carbon precursor materials along with labs dedicated to carbon material analysis with powder and electrochemical testing equipment.

Tailoring carbon coating to spherical natural graphite and developing efficient and sustainable coating technologies are critical steps in the production of BAM.

The process involves the application of a protective carbon layer at the surface of the graphite anode active material to form a more stable solid electrolyte interface, which enhances and calibrates what is known as the coulombic efficiency of the first and subsequent cycles, while tuning the performance of Li-ion insertion into and out of the active material.

Community opposition in Quebec cottage country may sink Lomiko Metals’ (TSXV: LMR) prefeasibility-stage La Loutre project, the seventh-largest undeveloped graphite deposit, after the province denied it funding.

The proposed open-pit mine about 100 km north of Ottawa landed research and development grants of $8.35 million (C$11.2 million) from the US Department of Defense and C$4.9 million from Natural Resources Canada in May. However, two provincial ministers said in September they wouldn’t approve the key Quebec infrastructure funding needed to build the C$236 million capex project because it lacks local support.

La Loutre is at a make-or-break point as Western countries promote domestic battery metal projects to supply the transition away from fossil fuels and from depending on China for minerals and processing. But it also lies at the juncture of support or not from a province considered to have some of the most pro-mining legislation and that is aggressively building local battery minerals capacity.

The Petite-Nation Lakes Protection Group, which represents five municipalities in the Laurentian Mountains region around La Loutre, says it’s concerned the proposed open-pit on the dividing line between two watersheds will pollute waters.

Lake district

“There are very big lakes around this project and there are thousands of people living around it, and more and more those are permanent residents, not only cottagers,” Petite-Nation organizer Louis Saint Hilaire said by phone on Monday. “That’s the reason why there’s such a mobilization against this project.”

Provincial Natural Resources Minister Blanchette Vézina said funding agency Investissement Quebec wouldn’t finance the project. Vézina echoed comments by Mathieu Lacombe, Quebec minister responsible for the Outaouais region. He cited Premier François Legault saying in 2022 that mining projects require public support to be approved.

“This is a project that needed government support to come together, and today I’m telling you it does not have it,” Lacombe told an event in Gatineau on Sept. 16. “This can reassure citizens who don’t want this project, which might be a good project, but isn’t in a good place.”

The company criticized the ministers the next day for going against the province’s leadership role in promoting battery metal projects and its mining-friendly reputation without waiting for important studies.

‘Contradictory’ stance

“We are surprised and disappointed at the negative comments directed toward Lomiko by members of the Quebec government,” the company said in a statement. “It appears the comments, where Quebec is seen as a global leader with a Plan for the Development of Critical and Strategic Minerals, is contradicting its own four strategic initiatives with comments made publicly about Lomiko and our efforts.”

Lomiko said government officials weren’t giving the company a chance for consultation and permitting through economic and proposed feasibility studies that so far show it has a “compelling” business case. The company is conducting environmental research as it seeks a partner to help develop the project.

“It appears the government has made pre-emptive conclusions about our project,” the company said. “We are committed to executing our business plan in the most environmentally friendly manner possible and will engage with any party concerned about our business to allay fears and foster informed discussions of graphite in community settings.”

Financing criteria

On Monday, Minister Vézina said the company didn’t meet the criteria to receive financial help form Investissement Québec.

“The government does not arbitrarily decide whether or not to support a project,” she told The Northern Miner by email. “We put in place a legislative and regulatory framework so that economic projects, including mining projects, can see the light of day. We can decide to become a financial partner in projects when they are in line with our priorities.”

La Loutre has an after-tax net present value of C$185.6 million at an 8% discount rate, according to a 2021 preliminary economic assessment.

The study shows an after-tax internal rate of return of 21.5%, payback period of 4.2 years and all-in sustaining cost of $406 per tonne of graphite concentrate over a 15-year mine life. Graphite flake concentrate was selling for about $830 a tonne in China on Monday, according to Fastmarkets.

Shares in Lomiko Metals fell 6% by early afternoon Monday in Toronto to C$0.16 apiece, valuing the company at C$7.2 million. They’ve traded in a 52-week range of C$0.10 to C$0.70.

Resource update

La Loutre holds 68.3 million indicated tonnes grading 4.08% carbon graphite for 3.1 million tonnes graphite in situ, the company said in updated resource in May. There are 12.7 million inferred tonnes grading 4.11% carbon graphite containing 800,000 tonnes of in situ graphite.

The proposed mine’s average annual graphite concentrate production would be 108,000 tonnes for the first eight years with a life-of-mine average annual output of 97,400 tones.

Saint Hilaire said his group is optimistic the project won’t advance because final approval lies with the province, and his group has told federal regulators as well. The group held three information sessions this year on the project and plans a community referendum in November next year.

“There were more than 100 business people from the region that said publicly they were against this project,” he said. “This is not standard.”

Located 120 km north of Montreal, Matawinie will be connected to the provincial hydropower network, enabling the access to clean energy to support mining activities and concentrator production of carbon-neutral graphite concentrate destined for the lithium-ion battery market, Nouveau Monde said.

The company added that the infrastructure is set to equip Matawinie as the world’s first all-electric open-pit mine when it starts operating.

“We are excited to move one step closer to building the mine of the future, powered by clean energy to responsibly extract and produce a critical mineral for global decarbonization,” Nouveau Monde CEO Eric Desaulniers said in a news release.

ABB will lead construction of the substation as the primary connection point between the mine site and Hydro-Québec’s hydropower generation facility, enabling full electrification of the Matawinie mine using clean energy.

The mine and concentrator will produce about 103,000 tonnes per year of graphite concentrate. The project is expected to generate 97% pure flake graphite for at least 25 years. The battery material plant is being built at Bécancour, Quebec. Earlier this year, the company inked offtake agreements with General Motors and Panasonic Holdings for the output.

The second phase of construction includes a contract for the electrical substation, engagement with contracts and contribution to the community’s economic vitality. ABB will engineer, build and commission the 120-kV substation. AtkinsRéalis and SRK Consulting are advancing the detailed engineering for the project.

Nouveau Monde said it is also engaged with local and Indigenous contractors to develop a procurement strategy and maximize the benefits to the regional economy. Funding has also been secured to build a recreational centre at the site.

“The North American market is eagerly awaiting the start-up of our Phase 2 ore-to-active-anode-material operations to access a local and carbon-neutral alternative to China’s supply,” Nouveau Monde chair Arne Frandsen said in a news release.

“With Canada having only mined 0.2% of the global natural graphite production last year – and the US 0% – Matawinie is set to be a gamechanger in today’s reshoring effort,” Frandsen said. “We are pioneering a new era of mining here, in North America, supported by top-tier engineering and local partnerships, setting new standards in sustainability and community integration.”

Matawinie may well be the world’s first all-electric open pit mine, says Nouveau Monde. Moreover, Benchmark Mineral Intelligence assessed the project to be the only natural graphite producer to qualify as industry leading in its ESG performance, outranking all the Western World, African and Chinese producers.

The plant, already backed by funding from London-based Appian Capital Advisory, is to produce 10,000 tonnes of the anode material a year. It will support US battery makers with a reliable supply for the anodes that store charge in lithium-ion batteries. They’re a critical component of battery manufacturers’ supply chains.

“This achievement is a testament to our sustainable processing technology’s role in strengthening US battery capabilities,” Urbix CEO Nico Cuevas said in a release. “We are committed to accelerating the development of our facility, providing a secure, end-to-end graphite anode material supply chain vital to the industry’s ambitions.”

The funding, part of the American bipartisan infrastructure law passed in 2021, aims to boost US battery production for electric vehicles. It also seeks to reduce reliance on China, which supplies over 90% of the world’s anodes for lithium batteries.

Job creation

The project is to create 200 permanent jobs and 300 construction jobs. It also includes a plan to boost careers in so-called STEM fields – science, technology, engineering and mathematics – for the clean energy sector.

In October, Urbix teamed up with Appian to fund the plant. Graphcoa, a Brazilian graphite producer backed by Appian, is to provide feedstock to the plant. This will ensure a seamless supply chain across the Americas, Urbix said.

The company has been operating a pilot-scale plant and laboratory in Mesa, AZ for seven years to refine its proprietary technology. It’s also developing a commercial scale demonstration module in Research Triangle Park, NC.

Its environmentally friendly and low-cost method to make coated spherical purified graphite avoids hydrofluoric acid to produce yields surpassing industry standards, Urbix says.

The projects will increase domestic production of advanced batteries and battery materials and follows the adoption of US EV tax credit rules to shift battery production and critical minerals away from China.

The awards fund battery-grade processed critical minerals, components, battery manufacturing, and recycling, and will generate $16 billion in total investment for the projects and support 12,000 production and construction jobs, the department said.

“Mineral security is essential for climate security,” said White House climate adviser Ali Zaidi. “This sets us up to lead on the next generation of battery technologies – from solid state to other new chemistries.”

Albemarle is set to receive $67 million for a project in North Carolina to produce commercial quantities of anode material for next-generation lithium-ion batteries, while Honeywell is set to receive $126.6 million to build a commercial-scale facility in Louisiana to produce a key electrolyte salt needed for lithium batteries.

DOE plans to award Dow $100 million to produce battery-grade carbonate solvents for lithium-ion battery electrolytes, while Clarios Circular Solutions, which is partnering with SK ON and Cosmo Chemical, is set to receive $150 million for a project in South Carolina to recycle lithium-ion battery production scrap materials from SK ON, the battery unit of SK Innovation.

Currently most US production scrap is exported by material traders to be processed, mostly in China, DOE said.

DOE plans a $225 million award for production of lithium carbonate by SWA Lithium, jointly owned by Standard Lithium and Equinor, using direct lithium extraction (DLE) technology. DOE also plans to award $225 million to TerraVolta Resources to produce lithium from brine using DLE.

Revex Technologies, a partnership co-founded by Lundin Mining, is set to receive $145 million for three Michigan facilities to turn waste from the only operating US primary nickel mine to yield domestic nickel production for at least 462,000 EV batteries yearly.

DOE plans to award $166 million to South32 Hermosa in Patagonia, Arizona for the mining of high purity manganese sulfate monohydrate (HPMSM) for electric vehicle battery chemistries. Currently over 96% of HPMSM is made in China.

DOE also plans to award $166.1 million for another HPMSM project in Louisiana for Element 25 from manganese ore sourced from an Element 25 mine in Western Australia.

Group14 Technologies is to receive $200 million to develop a US-based silane manufacturing plant in Moses Lake, Washington. The largest source of silane today is China, a material needed for silicon batteries.

Birla Carbon is set to receive $150 million for next-generation synthetic graphite that will not use material from China.

DOE previously awarded $1.82 billion to 14 projects. DOE said the projects selected must complete negotiations and an environmental review before they are awarded.

(By David Shepardson; Editing by Stephen Coates)

The Sunila site, located in Kotka, is owned by Stora Enso, a provider of renewable products in packaging, biomaterials and wooden construction, and a co-owner of CarbonScape. In 2023, Stora Enso closed its pulp production and lignin extraction operations at Sunila, and will now lease part of the site area to CarbonScape.

The company is developing a low-cost and carbon-negative biographite made from wood biomass. This material is designed to replace mined or fossil-based synthetic graphite in lithium-ion batteries, addressing supply chain and sustainability challenges in the electric vehicle and energy storage sectors. 

Since 2018, the company has been optimizing its biographite production process at its pilot plant in New Zealand. The new demonstration plant in Sunila represents a significant scaling up of this technology, paving the way for full commercialization, it said.

“Our partnership with Stora Enso and the decision to locate our demonstration plant in Sunila underscore the global potential of our technology,” CarbonScape CEO Ivan Williams said in a news release. “By producing biographite from sustainable wood sources, we’re not just creating a new supply chain – we’re redefining what’s possible in battery technology.”

CarbonScape is currently advancing its engineering study for the demonstration plant, as well as its first commercial plant. The aim is to start construction of the plant next year and begin sample production in 2026.

The flow-through model, which no other country has, allows resource companies to renounce tax expenses associated with exploration activities in Canada to investors, who can deduct the expenses in calculating their own taxable income. 

This year, Canada implemented changes to the Alternative Minimum Tax (AMT) rules, and the increase in the Capital Gains Inclusion rate which created uncertainty in the market.  

PearTree Financial founder and CEO Ron Bernbaum evaluates how Ottawa’s new tax rules are impacting the mining sector, and the outlook for critical mineral exploration, which plays a key role in the green energy transition. 

Watch the full interview with MINING.com’s Devan Murugan:  

Joint venture videos are paid-for content in arrangement with The Northern Miner Group.

Annual demand for energy-transition metals will grow fivefold by mid-century from 2023 levels under more aggressive action, according to BloombergNEF.

Yet that doesn’t mean we need to extract more stuff — in fact, we need less. While EVs and clean energy infrastructure will mainly consume electricity and require lots of metal, the total amount of materials the world mines will fall. Specifically, we’ll need almost no coal — which still contributes significant revenues to mining companies.

In fact, all the refined metals needed to reach net zero by 2050 will add up to less than the amount of coal mined in 2023 alone, according to think tank Energy Transitions Commission.

It’s worth noting these figures do not include the full weight of extracted ore, which often contains a small concentration of metal. The figures also don’t show the weight of extracted oil and gas. This is important because, all combined, fossil fuel taken out of the ground today still outweighs mined ores.

The metals that will be extracted into the future can also be recycled — unlike fossil fuels — meaning the world isn’t doomed to finding endless new sources. “It’s a shift from a single-use, extractive and linear energy system that has shaped our past energy system where fossil fuels once burned become greenhouse gas,” said Daan Walter of RMI, a clean-energy think tank, “to a multi-use, renewable, and recycled energy system of the future, where the world traps solar and wind power with metals that are used again and again.”

While there’s plenty of room to improve recycling rates of all the stuff that can be recycled from paper to plastic, more than half the energy-transition metals — steel, aluminum, copper and cobalt — are typically recycled after they reach the end of life, according to the International Resource Panel. And RMI’s analysis shows that recycling capabilities are rising rapidly.

Beyond recycling, other technological advances have led to huge declines in the use of metals already, according to a recent analysis from Walter and his RMI colleagues. Those include improving the storage capabilities of battery material and substituting metals with other cheaper or more abundant materials. Without those factors, the world would be consuming 138% more cobalt today, 127% more nickel and 58% more lithium — all metals that are used mainly in lithium-ion batteries.

When you factor in the emissions reductions that come from EVs and clean energy, mining seems to be on its way to becoming a more positive — rather than negative — force on the planet’s climate. But there are other important elements that must be addressed.

First, mining itself is resource intensive and greater strides must be made to improve its efficiency and reliance on zero emissions energy sources. Digging for metals also produces a lot of unusable earth and therefore recycling will become more important over time to reduce the need for continuous exploration. Finally, the sector needs to reckon with concerns of alleged child labor and trampling of Indigenous peoples’ rights.

Yet mining will be crucial to reaching net zero. After all, Walter notes that not reducing emissions from burning fossil fuels will set the planet on course for even greater destruction from climate change.

“We need to be aware of the trade-offs in our system,” he said.

(By Akshat Rathi)

The initial steps of its strategic review also include seeking partners for facilities in Poland, Northvolt said Monday in a statement, without specifying the size of any workforce reductions from among its about 6,000 staff. The company has sold a Swedish site it had previously planned for making cathode material, a precursor to manufacturing batteries.

“We are having to take some tough actions for the purpose of securing the foundations of Northvolt’s operations to improve our financial stability and strengthen our operational performance,” chief executive officer Peter Carlsson said.

The company is pausing operations at its Northvolt Ett Upstream 1 cathode material production facility until further notice, according to the statement.

Northvolt, the continent’s biggest homegrown battery manufacturer, has struggled to ramp up production at its main factory outside the town of Skelleftea near the Arctic Circle. It already pushed back plans for an initial public offering to next year because of a challenging market and the operational problems.

The market for battery makers continues to worsen amid a slump in EV sales. Companies including Volkswagen AG, Stellantis NV and Mercedes-Benz Group AG have had to scale back or refocus battery projects this year.

Northvolt said it remains committed to its facilities NOVO in Sweden, Northvolt Drei in Germany and Northvolt Six in Canada and is in close dialog with the key stakeholders.

Potential revisions to those projects’ timelines will be confirmed during the fall, along with any further cost-saving actions, the company said.

Northvolt’s main site delivered its first batteries in May 2022, but scaling up production has been far from smooth. BMW AG backed out of a €2 billion ($2.2 billion) order in June, while Volkswagen’s Scania complained of slow deliveries earlier this year.

There’s also been a sharp decline in electric vehicle sales in Europe as there aren’t enough affordable models to move past early adopters and the wealthy, and reduced government incentives have further sapped customer interest. The EVs that are sold are increasingly Chinese — or American — with BYD Co. and Tesla Inc. selling more than local manufacturers combined.

Northvolt, founded by two former Tesla managers about eight years ago, counted Volkswagen as its biggest individual owner at the end of last year, with a 21% stake, while funds managed by Goldman Sachs Asset Management had about 19%. Vargas Holding AB of Harald Mix had about 7% and Northvolt managers and staff a combined about 9%, according to its 2023 annual report.

Earlier on Monday, a long-awaited report by former European Central Bank President Mario Draghi on European Union competitiveness drew on the automotive sector for particular scorn. The bloc faces a real risk that EU carmakers continue to lose market share to China, which is ahead of the 27-member bloc in “virtually all domains,” while producing at a lower cost, the report said, calling the industry a “key example of a lack of EU planning.”

(By Rafaela Lindeberg)

The Australian miner’s half-year loss widened to A$67.1 million ($44.66 million) in the six months to June 30, from A$38.6 million in the same period a year earlier.

Its revenue fell 33% to A$19 million.

Graphite is a carbon-based material used in batteries and is a vital component in electric vehicles. China accounts for more than 70% of global supply of both natural, mined graphite and the synthetic variety, made from petroleum coke or coal tar, by-products of oil and coal processing.

China’s graphite production has expanded to about 1.2 million metric tons in 2023, from about 700,000 tons in 2020. The Asian country was also, until recently, a major market for graphite exporters like Syrah.

Syrah said it had not sold any graphite to China in the first half of the year amid “intense competition and oversupply issues in the Chinese domestic synthetic graphite active anode material (AAM) market”.

Production from its Balama operations in Mozambique declined 38% during the period to 34,900 tons. Sales also fell to 29,800 tons from 44,700 tons a year earlier.

The company said it shipped graphite to third-party customers, mainly Indonesia, reflecting “the development of a market for ex-China natural graphite AAM”.

Syrah also shipped 500 tons of graphite to its United States-based Vidalia AAM facility, which started production in February.

($1 = 1.5026 Australian dollars)

(By Nelson Banya; Editing by Mark Potter)

Read More: China lodges WTO complaint over Canada’s EV and metal tariffs

Under the critical minerals research, development and demonstration program, the funding will support the development of a circular economy for rare earth elements for permanent magnets and the recycling of graphite for use in lithium-ion batteries in Canada.

Cyclic Materials is receiving C$4.9 million to build a demonstration plant that will produce high-purity rare earth oxide and a cobalt-nickel hydroxide product from recycled materials. 

Green Graphite Technologies (GGT) will receive C$3.5 million to advance its GraphRenew technology which transforms used graphite into a material that can be reused. The upgraded graphite will undergo testing for use in electric vehicles and other battery-powered technologies. By focusing on recycling and upgrading graphite, GGT’s project could address gaps in the battery supply chain and support the commercialization of recycled materials.

Member of Parliament for Kingston and the Islands Mark Gerretsen announced the investments on behalf of the Minister of Energy and Natural Resources, noting that the projects will strengthen Kingston’s role as a leader in clean technology.

“New technologies will help address gaps in our world-leading supply chain, seize the economic opportunity presented to us, keep Canadian industry competitive in a rapidly evolving global context, and create jobs — now and for future generations. This is important news for Kingston, and beyond,” Minister of Energy and Natural Resources Jonathan Wilkinson said in a statement.

Canada’s focus on critical minerals is part of a broader strategy to build a strong domestic supply chain for clean technologies, supporting goals to reduce greenhouse gas emissions by 40% to 45% by 2030 and reach net-zero emissions by 2050.

The Australian company said the coated spherical purified graphite (CSPG) anode material produced at Kasiya was an “excellent feedstock” for anode materials, which presented a low-cost opportunity to develop lithium-ion battery supply chains outside of China.

The mining exploration and development company, in which Rio Tinto (ASX, LON: RIO) has a 19.76% interest, said the product had performance characteristics comparable only to “the highest quality” natural graphite battery material produced by dominant Chinese anode manufacturers.

“These results confirm that Kasiya graphite concentrate will be an excellent anode material feedstock to the battery industry,” managing director Frank Egar said in a statement. “Not only is the weathered, saprolite-hosted graphite easy to purify to very high-grades, the anode material produced meets the industry specifications.”

Few impurities

The high purity, near perfect crystallinity, and low levels of impurities in the natural flake from the Kasiya orebody contributed to the positive results, according to Sovereign Metals.

These attributes, the company noted, contribute to longer battery life, minimize loss of lithium in the battery charging cycle and offer high electrical storage capacity. Further optimization test work will take place at a pilot-scale facility in South Africa.

Sovereign Metals has also launched a program to evaluate the potential of Kasiya concentrate for use in traditional refractories and foundry applications. The initiative will utilize the coarse fraction of the concentrate produced at the pilot plant, marking a significant step in testing the material’s suitability for these industrial purposes.

After the first tranche of the investment, POSCO’s stake in Black Rock Mining will increase from 10.1% to 19.99%, the firm said in a statement.

In May 2023, the graphite developer had already signed an offtake agreement with POSCO to supply high purity graphite from the Module 1 of Mahenge graphite project, which is located in Tanzania.

As a return for the investment, Faru Graphite Corporation, a unit of the miner, will grant POSCO the future offtake rights for the fines graphite production of Mahenge Module 2, when built.

Black Rock Mining said the investment remains subject to various regulatory approvals, including one from the Foreign Investment Review Board in Australia and the Fair Competition Commission of Tanzania.

(By Shivangi Lahiri; Editing by Alan Barona)

Mines Minister Paul Kabuswe unveiled a strategy on Thursday that he said will allow Zambia to maximize the benefits from its deposits of metals key to the energy transition. Africa’s second-largest copper producer aims to more than quadruple output of the metal by early in the next decade, but it also has deposits of cobalt, graphite and lithium.

The state will set up a special purpose vehicle to invest in critical minerals under a design framework that includes a “production sharing mechanism” setting aside a minimum 30% of the output from new mining projects, according to the document unveiled by Kabuswe in Zambia’s capital, Lusaka.

Miners including Barrick Gold Corp., First Quantum Minerals Ltd. and China Nonferrous Mining Corp. are investing in their Zambian copper projects. Zambia is also counting on the Konkola and Mopani copper mines — under the control of Vedanta Resources Ltd. and Abu Dhabi’s International Resources Holding respectively — to ramp up production.

The government’s goal of producing 3 million tons of copper a year by 2031 requires existing assets to double their output to about 1.4 million tons, according to a separate document prepared by Kabuswe’s ministry. Sites currently in the exploration phase – such as the Bill Gates-backed KoBold Metals’ Mingomba project – are expected to provide an ambitious 1.2 million tons annually.

The government also intends to make investors in the critical minerals sector allocate at least 35% of procurement costs to local suppliers, according to the strategy. It will also review Zambia’s policy and regulatory environment to restrict the export of unprocessed materials.

(By William Clowes)

Northern Graphite (TSXV: NGC) reported on Thursday a 59% increase in production at its Lac des Iles (LDI) mine in Quebec during the second quarter of 2024, reaching 4,082 tonnes, up from 2,574 tonnes in the first quarter.

The boost in output, driven by the plant’s shift to a seven-day operation, resulted in C$5.5 million in revenue from the sale of 2,772 tonnes of graphite concentrate at an average price of C$1,972 per tonne.

Northern Graphite CEO Hugues Jacquemin stated, “We took decisive action to manage our cash position to ease the strain on our working capital and provide us with greater flexibility to pursue our growth catalysts.”

The company is working to extend the LDI mine’s life by approximately eight years, with plans to open a new pit by late 2024 or early 2025.

A recent resource estimate indicated 3 million tonnes of resources at an average grade of 6.4% graphitic carbon (Cg), containing around 213,000 tonnes of Cg. Inferred resources totalled 1.4 million tonnes at an average grade of 7.4% Cg.

Despite these operational successes, Northern Graphite faced financial challenges, failing to meet all agreements on its senior secured loan and royalty financing. This resulted in the reclassification of C$22.4 million from non-current to current liabilities. The lender and royalty holder waived all defaults, and discussions are ongoing to amend the loan terms.

Operationally, the miner reported C$100,000 in income from mine operations, an improvement from a loss of $500,000 in the first quarter. Cash costs were reduced to C$1,560 per tonne, despite operational inefficiencies and weather-related shutdowns.

The company continues to expand its market presence, engaging with global battery manufacturers to position itself as a key supplier in the electric vehicle market. However, a C$3.5 million non-cash impairment loss, due to lower anticipated graphite prices, contributed to a net loss of C$9.4 million for the quarter.

Northern Graphite is planning a new drilling program for fall 2024, aimed at further expanding resources and reducing the strip ratio. This program will be partly financed by a grant from Québec’s Ministère des Ressources Naturelles et des Forêts.

Northern Graphite is the only graphite producer in North America, and it has two more projects in the Bisset Creek area of Ontario and in Nambia.

Antimony is a little-known metal with multiple applications. Its largest end-use is as a flame retardant, but it is also found in solar panels and lead-acid batteries.

The US Department of the Interior has designated it a critical mineral because it is also essential for armour-piercing ammunition, infrared sensors and precision optics.

The Department of Defense was holding stocks of just over 90 metric tons (198,763 pounds) at the end of September 2022, according to the US Congressional Research Service.

The Annual Materials Plan for the current fiscal year allows for the purchase of up to an additional 1,100 tons.

That is going to be a tough challenge if the world’s dominant antimony producer limits global supply.

There is an emerging pattern here.

Last year Beijing flexed its metallic muscles with similar restrictions on exports of gallium, germanium and graphite in a tit-for-tat response to US controls on exports of advanced semiconductor chips to China.

Nor is antimony likely to be the last strategic metal to be weaponized for a potential trade war with the West.

Hot market

Antimony prices have nearly doubled since the start of the year to a record $22,750 per ton, basis metal delivered to Northwest Europe.

That’s in part because of shrinking exports from major producers. China’s exports are in medium-term decline due to higher demand from its solar energy sector, while Russian supply has been crimped by falling output and Western sanctions.

The flow from other big producing nations such as Vietnam, Tajikistan and Myanmar has been disrupted by the re-routing of shipments from the Red Sea due to Houthi attacks on shipping.

Analysts at Project Blue estimate the market was already looking at a 10,000-ton shortfall before China’s restrictions.

These new rules don’t set explicit limits on exports but rather require exporters to apply for licences for dual-use civilian and military materials and technology, a process that typically takes two to three months in China.

On paper, the controls are not targeted at any specific country but Chinese authorities can refuse licences to export to individual end-user companies or countries as they see fit.

If gallium and germanium are anything to go by, expect a collapse in outbound antimony shipments once the new rules come into effect on Sept. 15, followed by a weak recovery in volumes.

Chinese exports of the two chip metals fell by 74% and 63% respectively in the first quarter on a year-on-year basis.

Warning shots

China’s export controls are more a signalling device than an outright trade attack at this stage.

Beijing overplayed its critical metals hand in 2010 when it suspended shipments of rare earths to Japan. It lost a resulting World Trade Organization case and watched as high prices generated a wave of substitution away from rare earth magnets.

This time, export controls are being used as warning shots to deter Western countries from implementing further restrictions on exports of next-generation technology such as artificial-intelligence computer chips.

The messaging is aimed first and foremost at the United States, where there is bipartisan hostility to China’s growing military and technology challenge.

The US remains critically dependent on China for antimony. It consumed 22,000 tons of antimony products in 2023. Domestic production amounted to just 4,000 tons, mostly in the form of antimonial lead recovered from spent lead-acid batteries and absorbed back into the battery chain.

China accounted for 63% of US imports of antimony metal and oxide last year, according to the United States Geological Survey (USGS). The next largest supplier, Belgium, just 8%.

One domestic operator, Perpetua Resources, is hoping to reopen the Stibnite antimony mine in Idaho. The company has received backing from both the Pentagon and the US Export-Import Bank.

But, like many potential domestic critical metal producers, Perpetua is facing environmental opposition. First production at Stibnite is currently pencilled in for 2028, assuming Perpetua can navigate the permitting process.

Lengthening list

This is highly unlikely to be the last metallic warning shot fired by China.

Next up could be tungsten, another minor metal with overlapping civilian and military applications and a supply chain dominated by China.

China’s Ministry of Commerce issued new rules for exporters of tungsten, antimony and silver in November 2023, including a minimum financial liquidity threshold and a full record of overseas shipments over the 2020-2022 period.

The US REEShore Act already prohibits the use of Chinese tungsten in military equipment starting from 2026, which makes the metal an obvious choice for a retaliatory gesture.

However, China is not short of options when it comes to leveraging its dominance in critical metals production.

It is the largest source of supply for 26 of the 50 minerals currently classified as critical by the USGS, according to the Center for Strategic and International Studies think-tank.

It’s just a question of what comes next.

(The opinions expressed here are those of the author, Andy Home, a columnist for Reuters.)

(Editing by Alexander Smith)

While sales growth has certainly slowed down from the torrid pace of the last few years, in part due to base effects, the global EV market, including plug-in and conventional hybrids, should easily top 20 million units this year.

In combined battery capacity deployed – a better indicator of battery materials demand than unit sales alone – the global electric car market expanded by 23% during the first half of the year. 

In total, 365.5 GWh of fresh battery power hit the globe’s roads from January through June, according to data from Adamas Intelligence. The robust growth rate also comes despite a noticeable swing towards hybrid vehicles which have inherently smaller batteries. 

However, when pairing metals demand with prices in the EV battery supply chain the picture looks very different. 

The graphs from Toronto-based EV supply chain research firm Adamas Intelligence show the sales weighted average monthly dollar value of the lithium, nickel, cobalt, manganese and graphite contained in the batteries​​ of the average EV based on global end-user registrations, battery capacity and chemistries.

Put it all together and the raw materials bill for the average EV is down to $655 so far this year from $1,674 over the same period in 2023 and a monthly peak of more than $1,900 at the beginning of last year, according to Adamas Intelligence analysis.      

While the year on year comparisons are brutal, nickel, manganese and graphite have been on a noticeable upswing since the start of 2024. The sales weighted average value of nickel per EV is up 32% since January. 

Nickel is being boosted by the slow rollout of LFP battery chemistries outside China, a long-running trend towards high-nickel cathodes, and the growing popularity of NCM batteries for larger plug-in and range-extending hybrids where the energy density of nickel-based cathodes makes more sense given the weight of these vehicles. 

The price falls are great news for automakers struggling to bring prices for their EV offerings in line with internal combustion engine vehicles and should provide fresh impetus for consumer adoption.

For battery metals miners however, healthy demand growth from the EV sector is now entirely overshadowed by fears of a prolonged slump in prices.

Judging by the positive trends on a monthly basis since the start of the year, some of those fears can be allayed.   

For a fuller analysis of the battery metals market check out the Northern Miner print and digital editions. 

* Frik Els is Editor at Large for MINING.COM and Head of Adamas Inside, Toronto-based provider of battery metal and EV supply chain analysis.  

The government plans to announce a 100% levy on electric cars and 25% on steel and aluminum, according to people familiar with the matter, speaking on condition they not be identified because the matter is still private. Prime Minister Justin Trudeau is expected to unveil the policy in Halifax, Nova Scotia, where he’s gathered with the rest of his cabinet for a series of meetings about the economy and foreign relations.

Canada, an export-driven economy that relies heavily on trade with the US, has been closely watching moves by the Biden administration to erect a much higher tariff wall against Chinese EVs, batteries, solar cells, steel and other products. Canada’s auto sector is heavily integrated with that of its closest neighbor: The vast majority of its light vehicle production — which was 1.5 million units last year — is exported to the US.

Finance Minister Chrystia Freeland, the most powerful person in Trudeau’s cabinet, has been one of the most prominent voices in favor of a harder approach to Chinese vehicle exports, and becoming a closer trade ally with the US.

In June, she announced a public consultation on possible measures to make it more difficult for Chinese companies to sell electric vehicles in the Canadian market. The auto industry, she said, is “facing unfair competition from China’s intentional, state-directed policy of overcapacity that is undermining Canada’s EV sector’s ability to compete.”

In July, Freeland went further. During an interview with Bloomberg News, she said the tariffs consultation might go beyond electric cars.

“Geopolitics and geoeconomics is back,” she said at the time. “That means that Western countries— and very much the US — is putting a premium on secure supply chains and is taking a different attitude towards Chinese overcapacity.”

‘No illusion’

The European Union has also announced proposed new tariffs on electric vehicles important from China, though at lower levels than the US and now Canada are proposing.

Products made by SAIC Motor Corp. face additional duties of 36.3%, while Geely Automobile Holdings Ltd. and BYD Co. each face tariffs of 19.3% and 17%, respectively, according to a draft decision released last week. Tesla Inc. will see an extra 9% charge on Chinese-made vehicles.

Chinese leaders plan to raise the issue of tariffs when US National Security Adviser Jake Sullivan visits this week, according to the official Xinhua News Agency. Sullivan is due to meet with Foreign Minister Wang Yi and may also meet with Chinese leader Xi Jinping.

China has retaliated against Canada before. It previously restricted imports of Canadian canola seed for three years — a move seen as retribution for a decision by Canada authorities to arrest Huawei executive Meng Wanzhou in Vancouver on a US extradition warrant. Meng returned to China in 2021.

The value of Chinese electric vehicles imported by Canada surged to C$2.2 billion ($1.6 billion) last year, from less than C$100 million in 2022, according to data from Statistics Canada. The number of cars arriving from China at the port of Vancouver jumped after Tesla Inc. started shipping Model Y vehicles there from its Shanghai factory.

However, the Canadian government’s main concern isn’t Tesla, but the prospect of cheap cars made by Chinese automakers eventually becoming available. BYD informed the Canadian government in July that it intends to lobby lawmakers and officials about its plans to enter the country.

Trudeau also faced political and industry pressure. The Canadian auto sector had been pushing him to hike tariffs to protect domestic jobs and wages, arguing that China’s EVs are cheaper due to much weaker labor standards. The government has also bet big on automakers and manufacturers from democratic allies: the government has agreed to to multibillion-dollar subsidies for electric vehicle plants or battery factories for Stellantis NV, Volkswagen AG and Honda Motor Co., among others.

Steel and aluminum producers in Canada have also publicly and repeatedly urged the government to restrict China’s access, saying that Xi’s industrial policy allows the Asian powerhouse to unfairly flood foreign markets, putting local jobs at risk.

“China does not play by the rules,” Catherine Cobden, president and chief executive officer of the Canadian Steel Producers Association, told reporters earlier this month. “Government should be under no illusion that they do.”

(By Brian Platt)

Overseas sales of gallium, germanium and graphite show a spike in the month that preceded export controls as buyers stocked up, followed by a steep drop off and then a recovery, according to customs figures. The data could offer a precedent for buyers of antimony, a metal widely used in munitions, which is slated for restrictions beginning next month.

The restrictions on critical minerals, one of the few commodities where China dominates mined supply, were imposed in August and December. The curbs are widely viewed as Beijing’s response to US-led controls on its access to high-end chips and technology linked to artificial intelligence. China is also motivated to restrain exports to maintain low prices for its own refineries and factories.

Gallium sales have shown the biggest recovery since the constraints were imposed. The other two minerals have lagged somewhat, although that’s more to do with other factors, including efforts to loosen China’s grip on supply.

Natural graphite exports fell 17% to 101,233 tons in the first seven months of 2024 from a year ago. That’s largely due to a ramp up in overseas mining, as well as slowing demand for the electric vehicles that use the material in their batteries, said Xu Peng, an analyst with BloombergNEF.

Chinese graphite prices have plunged over the past year, part of the general weakness in battery materials. Gallium and germanium remain very strong, however, with the latter at a record due to robust global demand across a swathe of high-tech applications, from infrared sensors to fiber-optics.

Read More: Graphite miners lobby US govt to impose levy on China-sourced EV material

Located in southern Madagascar, the Molo mine entered production in June of 2023 and delivered its first graphite product, the patented SuperFlake, the same year. It is expected to reach its full production capacity of 17,000 tonnes per year for Phase 1 this summer.

The new equipment is designed to sort the SuperFlake graphite concentrate into individual size fractions to meet customer specifications. With the upgrade, the Molo mine is now meeting or exceeding recovery and grade expectations, consistently producing concentrate at a carbon content of between 95%-97%, the company said.

Nextsource said it is now transporting these saleable SuperFlake concentrates from the Molo mine to the Port of Tulear in preparation for export.

“The team have delivered on the opportunity to capitalize on the quality of the Molo graphite deposit by improving recoveries and grades,” CEO Craig Scherba said in a news release. “Having previously shipped test material for qualification, we are now producing high-quality, saleable graphite concentrate.”

During the screen installation, additional process plant upgrades were also carried out at the Molo mine, which the company believes will further enable sustainable and enhanced recoveries going forward. As a result, plant stability has been optimized, and the operation is well positioned ahead of its planned Phase 2 expansion, NextSource said.

Phase 2 is anticipated to begin from the third year of production, with a nameplate capacity of 150,000 tonnes per annum, according to a 2023 feasibility study.

The production profile is based on measured resources of 23.6 million tonnes grading 6.32% Cg, indicated resources of 76.8 million tonnes grading 6.25% Cg and inferred resources of 40.9 million tonnes grading 5.78% Cg for the Molo deposit.

Shares of NextSource Materials were up 2.6% by 1:00 p.m. ET following Wednesday’s announcement, giving the company a market capitalization of C$123.1 million ($89.6m).

Graphite is thus found in a wide range of consumer devices, including smartphones, laptops, tablets and other wireless devices, earbuds and headsets. Besides being integral to electric car batteries, graphite is found in e-bikes and scooters.

A White House report on critical supply chains showed that graphite demand for clean energy applications will require 25 times more graphite by 2040 than was produced in 2020.

Graphite has the largest component in batteries by weight, constituting 45% or more of the cell. Nearly four times more graphite feedstock is consumed in each battery cell than lithium and nine times more than cobalt.

Graphite is therefore indispensable to the EV supply chain.

BloombergNEF expects graphite demand to quadruple by 2030 on the back of an EV battery boom transforming the transportation sector. It is not an exaggeration to say that electrification of the global transportation system doesn’t happen without graphite, copper and lithium.

The lithium-ion batteries in electric vehicles are composed of an anode (negative) on one side and a cathode (positive) on the other. Graphite is used in the anode.

The cathode is where metals like lithium, nickel, manganese and cobalt are used, and depending on the battery chemistry, there are different options available to battery makers. Not so for graphite, a material for which there are no substitutes.

Synthetic vs natural graphite

Synthetic, or artificial graphite, and natural graphite are both used in battery anode applications, but synthetic dominates the market.

China is the number one graphite producer in the world, outputting 850,000 tonnes in 2022, and accounting for two-thirds of mine supply. Moreover, the Asian nation also controls 80% of synthetic graphite production.

Some battery-makers are keen on natural graphite due to its lower carbon emissions compared to synthetic graphite, which is made from petroleum coke.

Synthetic graphite’s primary application is in the graphite electrodes used for electric arc furnace steelmaking, which accounts for 70-80% of graphite electrode consumption. The market for this sector is estimated at 1.6 million tons in 2024, and is expected to reached 1.9Mt by 2029, according to Mordor Intelligence.

The boost is partly due to the Chinese government’s recent Work Plan for Steady Growth of the Iron and Steel Industry, which promotes the expansion of steel production with electric arc furnaces.

Total synthetic graphite consumption is pegged at 3.04Mt this year, compared to 1.68Mt for natural graphite.

Battery supply chain could reach $400 billion

Global demand for batteries is increasing largely due to the imperative to switch from gas-powered to electric vehicles and the broader energy transition from fossil fuels to renewables.

According to a new report from Bain & Company, global battery demand is expected to quadruple between 2023 and 2030 to 4,100 gigawatt hours (GWh).

The report emphasizes that lithium-ion batteries will remain the dominant technology for the foreseeable future, with nickel-manganese-cobalt (NMC) and lithium-iron-phosphate being the most common cathode chemistries.

“Emerging technologies such as solid-state and high-density sodium-ion are still in the prototype and pilot manufacturing stages, and their market share is expected to stay in the single-digit range until 2030,” the firm said.

A 2023 article by McKinsey, a consulting company, reported on a 2022 analysis by the McKinsey Battery Insights team. The analysis projects that the entire Li-ion battery supply chain, from mining through recycling, could grow by over 30% annually from 2022 to 2030, when it would reach a market value of more than $400 billion.

Demand for these batteries is seen increasing from about 700 gigawatt-hours (GWh) in 2022 to around 4.7 terawatt-hours (TWh) by 2030. Electric vehicles will account for the vast majority of demand — about 4.3 TWh — driven mainly by three factors:

• A regulatory shift toward sustainability, which includes new net-zero targets and guidelines, including Europe’s “Fit for 55” program, the US Inflation Reduction Act, the 2035 ban of internal combustion engine (ICE) vehicles in the EU, and India’s Faster Adoption and Manufacture of Hybrid and Electric Vehicles Scheme.
• Greater customer adoption rates and increased consumer demand for greener technologies (up to 90 percent of total passenger car sales will involve EVs in selected countries by 2030).
• Announcements by 13 of the top 15 OEMs to ban ICE vehicles and achieve new emission-reduction targets.

Energy storage systems are also expected to require a lot of lithium batteries. According to McKinsey,

Battery energy storage systems (BESS) will have a CAGR of 30 percent, and the GWh required to power these applications in 2030 will be comparable to the GWh needed for all applications today.

While much of the demand is expected to come from China, which leads the electric-vehicle market, the consultancy notes the highest growth rates are in the United States and the European Union.

Between 120 and 150 new battery factories will need to be built between 2023 and 2030.

Revenues along the battery supply chain will quintuple from about $85 billion in 2022 to over $400B in 2030, according to McKinsey.

Drilling down to North America, Mordor Intelligence says the North American battery market is expected to grow from $16.1 billion in 2024 to $68.9B in 2029, a CAGR of 33.7%. The firm concurs with McKinsey, in that the market will be driven by the increasing adoption of electric and hybrid vehicles, and the increasing demand for energy storage systems.

The United States obviously dominates the market for lithium batteries in North America. Revenue was valued at $11.2 billion in 2023 and is expected to reach $35B by 2028, for a CAGR of 25.4%.

The Canadian battery market was valued at just $1.4B in 2023, but it is forecast to nearly triple in five years, growing at a CAGR of 22.1% and reaching $3.9B by 2028.

The most important trend in North America, according to Mordor, is automotive batteries becoming the fastest-growing segment of the market. Specifically:

• Lithium-ion battery systems drive the performance of plug-in hybrid and electric vehicles by meeting OEM requirements for driving range and charging time. Their high energy density, fast recharge capability, and high discharge power make lithium-ion batteries the preferred technology.
• Lithium-ion batteries are considered environmentally friendly compared to other batteries as they do not contain toxic materials like lead or cadmium. Additionally, lithium-ion batteries provide a high power output.

Anodes

The battery anode market is dealt with separately despite anodes being part of lithium-ion batteries. A report by Polaris Research valued the global anode market at $11.5 billion in 2023. By 2032, revenues should reach $123.7B, with the industry growing at a CAGR of 30.9%.

The main reason for such a high growth rate is increasing EV adoption.

“The lithium-ion battery anode market is experiencing notable growth due to electric vehicle acquisition. The growing approval of plug-in hybrids and EVs instantly translates into growing demand for lithium-ion batteries,” states Polaris Market Research via PR Newswire.

Another report by Markets&Markets projects anodes will grow from a $12 billion industry in 2023 to $46.5 billion in 2028.

The report concurs with Polaris Research’s observation that electric vehicles are the key demand driver, but adds that industrial applications are increasingly adopting lithium-ion batteries for their efficiency and clean-energy benefits.

Growth will be fueled by the rising need for energy storage solutions, the shift toward sustainable energy sources, and government initiatives promoting clean energy adoption, according to the report. 

The growth of the anode market will be impacted by factors including technology, the level of demand for electric vehicles, renewable energy integration, and the development of consumer electronics.

EV adoption includes EVs and plug-in hybrids, a key component of which is the anode. Energy storage devices are increasingly used in hybrid automobiles and renewable energy. Lithium-ion batteries have proven to be suitable for large-capacity energy storage systems.

Anodes made from synthetic graphite are expected to be the largest market from 2023 to 2028. Despite its higher cost compared to natural graphite from graphite mines, “its well-defined structure facilitates smoother lithium-ion movement, enabling faster charging and higher reliability,” states Markets&Markets. An additional advantage of synthetic graphite is its longer lifespan compared to natural.

Active anode materials

The anode, also known as the negative electrode, is typically made up of graphite powder baked onto copper foil. According to Targray,

Graphite is a crystalline solid with a black/grey color and a metallic sheen. Due to its electronic structure, it is highly conductive and can reach 25,000 S/cm2 in the plane of a single-crystal.

Graphite is commonly used as the active material in negative electrodes mainly because it can reversibly place Lithium-ions between its many layers. This reversible electrochemical capability is maintained over several of thousands of cycles in batteries with optimized electrodes. However, one requirement for this application is that the Graphite surface must be compatible with Lithium-ion battery chemistry (salts, solvents and binders).

Within the anode market, the active anode material segment is divided into four categories: natural and synthetic graphite, silicon, lithium-ion compounds, and lithium metal.

To be suitable for lithium-ion battery manufacturing, anode materials should meet the following requirements:

• Excellent porosity and conductivity
• Good durability and light weight
• Low cost
• Voltage match with preferred cathode

Defense applications

Virtually every US military system requires mineral components, from steel and titanium to graphite composites and cadmium alloys. Global defense spending shows that military demand is increasing for these platforms, munitions, and thus minerals. (Modern War Institute)

Graphite is the ideal material for defense purposes thanks to its unique properties, i.e., it is able to withstand very high temperatures with a high melting melting point; it is stable at these high temperatures; it is lightweight and easy to machine; and it is corrosion-resistant.

Four ways graphite has transformed aerospace engineering to make it more efficient, are increasing the service life of airplanes; improving fuel economy; having the ability to run hotter engines; and reducing the weight of airplanes.

Fun fact: when an industry giant replaced a single leaded bronze part with a graphite equivalent, it saw a weight decrease of 1.5 lbs. In aerospace, every pound saved equates to $5,000 a year in fuel costs.

A report last year from the Hague Centre for Strategic Studies found that natural graphite and aluminium are the materials most commonly used across military applications and are also subject to considerable supply security risks that stem from the lack of suppliers’ diversification and the instability associated with supplying countries.

The report assessed the degree of criticality for each of 40 materials deemed critical or soon to be critical. Natural graphite was rated “very high-risk” for air applications, and “high-risk” for sea applications.

In the table below, natural graphite is rated red, very high risk, for its use in fighter aircraft, main battle tanks, submarines, corvettes, artillery and ammunition. Aluminum, used in fighters, tanks, missiles, submarines, corvettes, artillery, ammunition and torpedos, was also rated a very high-risk material.

For the construction of tank guns, Howitzers, machine guns in infantry fighter vehicles, and GPS/SAL guidance systems in ammunition, natural graphite is found in combination with other materials to construct these components.

The amount of equipment used by the US military alone demonstrates a captive market for natural graphite. One source reported in 2018, the US government had roughly 440,000 vehicles, 780 strategic missiles, 278 combat ships and 14,000 aircraft. 

It notes A key market risk for the US defense sector is a material reliance on a geopolitical competitor that can create a shortage of natural graphite on a whim that would directly impede manufacturing of critical defense systems and equipment in the US.

The Defense Logistics Agency, the same agency that manages the National Defense Stockpile, is reportedly looking for a domestic source of isomolded graphite production, used by the military in several applications, including tactical munitions, strategic rockets and missiles, and large advance-launch systems.

The US military uses graphite flakes to block electromagnetic waves that the enemy might detect and use to target troops in the field. Essentially a type of smoke, synthetic graphite flakes are released from ground-based systems that disperse bulk powders into the atmosphere. The powders, called Micro-260 and K-2, are composed of flakes of various sizes.

It should be pointed out that synthetic graphite, made from petroleum coke, is used in all the downstream industries that produce military equipment components, such as foundries (graphite electrodes) that make steel; and facilities that manufacture wheels for vehicles or body armor for soldiers (various types of graphite molds and dies).

Synthetic graphite is employed directly in graphite nozzles, used in high-powered rockets due to graphite’s ability to withstand extreme temperatures. These graphite components can be as simple as a hole drilled into a synthetic graphite block, or a more advanced, machined nozzle that has its own cooling system.

A new graphite application for military and industrial usages is a graphite oxide patented by the US Army. The water recycling system is designed for washing out tanks and trucks exposed to chemical and biological weapons.

The system filters out impurities at up to 600 gallons of wash water per hour, allowing dumped wastewater to be re-used or safely dumped.

Downstream from military applications, graphite is used widely in the aerospace industry. According to Semco Carbon, heat treating synthetic graphite is used as engineered material to create precision machined plates, posts, nuts and bolts along with heating elements and fixtures used in the heat treatment of aerospace metals such as titanium, stainless steel, and other alloys…

As an extension of heat treating for aerospace, a common graphite use is as a susceptor. “A susceptor is a material used for its ability to absorb electromagnetic energy and convert it to heat (which is sometimes designed to be re-emitted as infrared thermal radiation).” 

Another use for graphite is as a mold. Graphite molds are used to cast titanium, aluminum, and stainless steel to near net shapes. Graphite molds are also used for molding non-metal composites. An example of this is for a satellite dish deployed on a satellite.

Graphite itself is used for jet and rocket engine nozzles and Carbon/Graphite vanes. Impellers and rotors move aviation fuel safely without the dangers of creating sparks to ignite fuel.  

Graphite One Inc. (TSXV:GPH, OTCQX:GPHOF)

Graphite One (TSXV:GPH, OTCQX:GPHOF) plans to invest $435 million to build a graphite anode manufacturing plant in Trumbull County, Ohio, between Cleveland and Pittsburgh.

As Graphite One builds its anode active materials (AAM) production plant, first to accommodate synthetic graphite, then natural graphite from the Graphite Creek mine, the company has the opportunity to make other graphite products. Two possibilities are silicon-blend graphite, where silicon is embedded within a graphite matrix in the anode; and hard carbon, which improves ionic flow and provides higher power densities in batteries.

On July 25, G1 announced it has entered into a non-binding Supply Agreement with Lucid Group, Inc. (NASDAQ: LCID), a California-based electric vehicle manufacturer, for AAM used in EV batteries.

“This is a historic moment for Graphite One, Lucid and North America: the first synthetic graphite Supply Agreement between a U.S. graphite developer and U.S. EV company,” said Anthony Huston, Graphite One’s president and CEO.

“G1 is excited to continue pushing forward developing our 100% U.S. domestic supply chain. We appreciate the support from our investors and the grant from the Department of Defense. Subject to project financing required to build the AAM facility, the Supply Agreement with Lucid puts G1 on the path to produce revenue in 2027, and that’s just the beginning for Graphite One as work to meet market demands and create a secure 100% U.S.-based supply chain for natural and synthetic graphite for U.S. industry and national security.”

The Supply Agreement follows Graphite One’s selection in March 2024 of a site for the company’s proposed AAM facility in Warren, Ohio.

Through its wholly-owned subsidiary, Graphite One Alaska, the Vancouver-based company chose Ohio’s Voltage Valley, entering into a 50-year land-lease agreement on 85 acres. The deal also contains an option to purchase the property once known as the Warren Depot, part of the National Defense Stockpile infrastructure, until the brownfield site was processed through the Ohio EPA Voluntary Action program a decade ago, certifying that the land does not need further cleanup. 

Construction is slated to start within the next three years. According to Graphite One, the Voltage Valley site is in the heart of the automobile industry, with ample low-cost electricity produced from renewable energy sources. It is accessible by road and rail, with nearby barging facilities. Existing power lines are sufficient for Graphite One’s Phase 1 production target of 25,000 tonnes per year of battery-ready anode material. Land is available for follow-on phases to ramp up to 100,000 tpy of production.

The five-year, non-binding Supply Agreement provides for 5,000 tpa of synthetic graphite. Sales are based on an agreed price formula linked to future market pricing, as well as satisfying base-case pricing agreeable to both parties.

The Ohio facility represents the second link in Graphite One’s graphite materials supply chain; the first link is Graphite One’s Graphite Creek mine in Alaska, currently working toward completion of its Feasibility Study in Q4 2024, on an accelerated timetable, funded by a $37.5 million Defense Production Act grant from the Department of Defense in July 2023.

Subject to financing, the plant will manufacture synthetic graphite until a natural graphite anode active materials becomes available from the company’s Graphite Creek mine, located near Nome, Alaska, according to the March 20th news release.

The plan also includes a recycling facility to reclaim graphite and other battery materials, to be co-located at the Ohio site, which is the third link in Graphite One’s circular economy strategy.

Tie-in with geopolitics

At a recent briefing held at the US Capitol, Dan Sullivan of Alaska, a Republican who sits on the Senate’s armed services committee, reminded the audience of the wider implications of the deal between Graphite One and Lucid.

He described how, the night before, US and Canadian fighter jets had intercepted a combined Russian-Chinese bomber patrol over the Bering Sea, in international airspace close to Alaska. It was the first time those two countries had conducted such a joint drill on North America’s Arctic doorstep.

Bloomberg observes how graphite “is at the center of the tightening convergence between control of critical minerals, the energy transition, and national security.”

Above we pointed out graphite’s many defense applications.

Competing with Chinese graphite producers who have a two-decade head start will neither be easy nor cheap. However, the strategic challenge presented by China, especially in tandem with hostile Russia, cannot be brushed aside, Bloomberg concludes:

Hence, building the US critical minerals and cleantech supply chain necessarily entails a mixture of strategic government backing and private funding to get it off the ground. Disparate as they seem, there’s a direct, and darkening, line between that stand-off in the skies near Alaska and Graphite One’s deal with Lucid, and not only because of the uncanny timing. The transition of our global energy system and the transition to a new era of geopolitical contest are increasingly inseparable.

Conclusion

China is by far the biggest graphite producer at about 80% of global production. It also controls almost all graphite processing, establishing itself as a dominant player in every stage of the supply chain.

(China mines about two-thirds of the world’s natural graphite, controls about 60% of synthetic graphite, and almost 100% of coated spherical graphite used in EV batteries. China also accounts for 98% of announced anode manufacturing capacity expansions through 2030, according to the International Energy Agency.)

The United States currently produces no graphite, and therefore must rely solely on imports to satisfy domestic demand.

Washington has finally begun to recognize this vulnerability.

In 2022, President Biden issued a Presidential Determination under the 1950 Defense Production Act (DPA), declaring graphite and four other key battery minerals at risk of supply disruptions, as “essential to the national defense.” 

Graphite is included on a list of 23 critical metals the US Geological Survey has deemed critical to the economy and national security. 

The aim of the Defense Production Act is to wrest control of “clean technology” (e.g. EVs, renewables) supply chains from China, which has been building and controlling them for decades.

Graphite One could take a leading role in loosening China’s tight grip on the US graphite market by mining feedstock from its Graphite Creek project in Alaska and shipping it to its planned graphite anode manufacturing plant in Voltage Valley, Ohio. Initially, G1 will produce synthetic graphite and other graphite products from purchased graphite.

Graphite One could supply a significant portion of the graphite demanded by the United States.

Consider: In 2023, the US imported 83,000 tonnes of natural graphite, of which 89% was flake and high-purity, suitable for electric vehicles.

Based on G1’s Prefeasibility Study (PFS), not the Feasibility Study which is expected this fall, the Graphite Creek mine is anticipated to produce, on average, 51,813 tonnes of graphite concentrate per year during its projected 23-year mine life.

Automakers and defense companies have been raising alarm bells over the fact that the United States hasn’t mined any graphite since the 1950s, and even if it had, it would need to be shipped to China for processing. G1 intends to play a large part in correcting this.

The US Energy Department forecasts that global graphite demand could be more than eight times current production by 2035.

Assuming a 60 kilowatt-hour battery, every million EVs requires almost 80,000 tons of graphite. Last year the US imported 73,870 tonnes of flake graphite needed for EVs. Global demand for flake graphite is projected by Benchmark Mineral Intelligence to more than triple by 2030, to 4.1 million tonnes.

Graphite One plans to produce, first, synthetic graphite “with ample low-cost electricity produced from renewable energy sources” and later on, to feed the anode active materials (AAM) plant in Ohio with natural graphite from the Graphite Creek mine.

Its strategy dovetails with the government’s plan to reduce dependence on China for the mining and processing of critical minerals, especially graphite, for which the United States is totally dependent on foreign, namely Chinese sources.

The only way to alleviate import dependence is for the United States to find its own sources of graphite production and manufacturing.

The company’s Prefeasibility Study (PFS) was based on the exploration of only one square kilometer of the 16-km deposit, meaning that G1 could potentially increase production by a factor several times the proposed run rate of 2,860 tonnes per day.

Only about 10% of the mineralized trend has been drilled so far.

Graphite One’s 2024 field program will gather the remaining data required to complete the Feasibility Study, expected in Q4. The company says three drill rigs are currently operating to glean geotechnical information needed to engineer the pit walls and foundations for the process facility, tailings/waste rock facility and other infrastructure.

(By Richard Mills)

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Recall when Glencore heralded a new dawn for mining thanks to EVs – telling the audience at its 2017 investors day that “as early as 2020, when electric vehicles would still make up only 2% of new vehicle sales, related metal demand already becomes significant.”

That prediction proved conservative – global penetration reached over 5% in 2020. The data is still trickling in, but the second quarter of this year is on course to set a new record for the electrification of the global car parc with 26% of passenger vehicle sales either full electric, plug-in or conventional hybrids. 

Traditional hybrids remain a meaningful source of battery metals demand (thanks to large volumes and the widespread use of nickel metal hydride batteries) and even when stripping out Priuses (Pria?) with new owners, nearly one in five vehicles sold worldwide in Q2 was electrified.     

Yet, when pairing robust metals demand with often volatile prices in the EV battery supply chain the picture looks very different. 

The graph from Adamas Intelligence below shows the monthly dollar value of lithium, nickel, cobalt, manganese and graphite contained in the batteries​​ of EVs based on global end-user EV registrations, battery capacity and chemistries.

When looking at a streamgraph you don’t want the bulge to be at the start, but a chart that looks like an ink blot Rorschach test like the one below is hardly better. 

December 2022 saw a record $4.2 billion worth of battery metals business done. 

December is usually a blowout month for the global EV industry and the final month of 2023 was no exception. During December 2023 battery metals consumption was up another 20% year-over-year to a combined 140,000 tonnes on the back of a 23% increase in total giga-watt hours of battery capacity hitting the world’s roads that month. 

However, more than $2.8 billion had disappeared from the value chain as metal prices capitulated. 

During calendar 2022, the monthly value of combined battery metals deployment averaged $2.6 billion. In 2023, that number was $2.1 billion. So far this year? Down to $1.5 billion. 

In the analysis below, materials deployed constitute installed terminal tonnes and do not take into account yield losses during conversion, refining and manufacturing processes, or production scrap.

This means that at the mine mouth the required tonnes (and values) to feed the supply chain are considerably higher. 

Also, with 2023’s slump still in the rearview mirror, there is growing consensus that battery metals prices have bottomed out.

And combined with still healthy, albeit slowing EV sales growth should provide battery metals miners some comfort. But right now, that’s mostly cold comfort. 

In a news release this week, SRG, now rebranded as Falcon Energy Materials, said it will continue to trade in the Canadian market under a new ticker symbol (FLCN) while maintaining its new headquarters in Abu Dhabi.

The company completed its re-domiciliation to UAE in early July, a move that it says would provide the company with “expanded strategic options” as it advances partnership discussions. The name change was also announced to reflect a significant symbol in UAE culture.

Falcon Energy is currently developing the Lola graphite project in the Republic of Guinea. The UAE has double taxation and bilateral investment treaties with the African nation, the company noted.

The Canadian government, meanwhile, has begun introducing policies that make it more difficult for foreign entities, especially those from China, to invest in its critical minerals sector. In March, Falcon (then SRG) was forced to cancel a tie-up with Chinese anode materials manufacturer C-ONE.

The transaction would have seen C$16.9 million ($12.7 million) invested into the company, as well as a partnership formed to build an anode facility in Morocco, where Falcon plans to process the graphite mined from the Lola site.

The Lola deposit is estimated to contain mineral resources of 46 million tonnes (measured and indicated) grading 4.09% graphitic carbon, for 1.88 million tonnes of graphite material. Over half of the graphite at Lola is considered large flake (+80 mesh), and 26% is “jumbo” flake material (+50 mesh ), Falcon said.

Commissioning of the mine is now underway, with commercial production scheduled for September of this year. The Vancouver-based graphite miner plans to fulfill initial purchase orders as early as the fourth quarter.

The infill drilling and short-term mine plan/sequence for the first quarters of the operation are complete. Pre-strip is finalized and approximately 50,000 tonnes of ore will be placed on the ore pad in August 2024, South Star said.

The mine plan confirmed simple, open pit mining of oxide ore with at-surface mineralization. Large-scale pilot-plant testing had been completed, showing approximately 65% of graphite concentrate is +80 mesh with good recoveries and 95%-99% graphitic carbon (Cg).

The Phase 1 plant has the capacity to produce approximately 12,000 tonnes per year of natural flake graphite concentrates. This would make Santa Cruz the second-largest producer in the Americas, as well as being the region’s first new graphite mine in nearly 25 years.

“We are pleased to have achieved this important milestone of substantial completion of the Phase 1 construction and continue advancing towards ramp-up and commercial production,” South Star CEO Richard Pearce said in a news release.

In 2026, the mine will move towards Phase 2 with a larger-scale plant that is planned to produce between 25,000-30,000 tonnes of concentrate per year. The third and final phase is targeted for 2028, producing about 35,000 tonnes a year. Environmental approvals for both phases are in place.

According to a 2020 pre-feasibility study, the Santa Cruz operation will have a life of 12 years with a post-tax net present value (at 5% discount) of $81.2 million and an internal rate of return of 35%. The capital costs for the Phases 1 and 2 are estimated at $8 million and $27 million respectively.

SRG Mining, now Falcon Energy Materials (TSXV: SRG), completed its move to the Middle East in early July, after first disclosing its plan to relocate in November, and choosing UAE as its new home in February. It’s the first TSX-listed company to redomicile to the Emirates. 

“We believe we can raise more money in the Middle East than we can in Canada. So that’s why we just decided to move on,” Bos said. 

The London, U.K.-based executive, who spent eight years with Ivanhoe Mines (TSX: IVN) including a stint as EVP Africa advancing its Kamoa-Kakula copper mine, says “more than several” companies have contacted Falcon to ask questions about its redomiciling experience.  

SRG decided to make the move after it became clear that a C$16.9-million financing that would have given China’s Carbon ONE New Energy Group (C-One) a 19.4% stake in the company wouldn’t necessarily receive a timely approval. The deal was originally announced in June 2023. 

Foreign investment scrutiny 

Under the Investment Canada Act, a federal national security review can take up to 200 days. 

“In the end, the minister has discretion on what they approve of and what they want to keep reviewing.” Bos said. “But for a junior company, we don’t always have the time to wait for several quarters, a year, to get these kind of approvals.” 

The irony is that SRG Graphite had planned – and still plans – to serve Western markets with production from its Lola project in Guinea, and planned anode facility in Morocco. 

China’s control of both primary mined graphite supply and downstream processing of the battery material puts it in the same category as rare earths, Bos says. 

“That’s why there’s a need for a company like ours that can decouple part of the supply chain from China.”  

SRG turned to C-One because the funding and expertise it needed to execute those plans wasn’t available from North American markets. A feasibility study update last year showed the project would cost US$185 million to build and could produce 94,000 tonnes of graphite flakes in concentrate over a mine life of 17 years.

“It’s the funding, it’s the technology, it’s the offtakes, it’s the expertise. It’s a very complicated supply chain, way more complicated than people actually appreciate,” Bos said. 

Although based in China, C-One’s investment and technical expertise would have helped the company to build capacity outside of China. With the lowest-cost production in China, any anode plant based elsewhere would have to serve Western markets, he notes. 

Risk to Canada’s capital markets 

According to the TSX, 40% of the world’s mining companies are listed on either the TSX or TSX Venture exchanges.  

But the fed crackdown could encourage other juniors that need similar access to Chinese funding or expertise to redomicile and to a decline in Canada’s status as a top destination for mining listings and mining funding. 

That’s especially so for companies with preproduction assets outside of Canada, warns John Turner, a partner in Toronto at Fasken and leader of the law firm’s global mining group. 

“If we start losing these companies to the Middle East or Australia or (elsewhere), we’re killing one of the few industries where we have a global presence,” he said. 

Turner noted that Canada’s got an extensive ecosystem of technical and environmental professionals, investment bankers, legal and accounting firms that support mining and are also sustained by the sector. 

Sasa Jarvis, a Vancouver-based partner at McMillan whose practice focuses on corporate and securities law, says Canada could risk being removed from the equation for new companies choosing where to incorporate. 

“It undermines the Canadian capital markets,” Jarvis said. “It encourages those companies with global assets to redomicile and, with other restrictions in Canadian securities regulation that discourage incorporation in non-traditional jurisdictions, makes Canadian stock exchanges less attractive for new projects when they’re selecting jurisdictions of incorporation.”  

“So, with the ability to accept Chinese funding reduced or essentially eliminated, and no new alternative to that capital presented, companies will look at other jurisdictions to incorporate in,” she added.  

“If capital is shifting away from Canada, it’s going to impact Canada’s mining industry, our capital markets, our investment community.” 

Before you go… 

For juniors considering redomiciling, there are a few things they should know. 

Redomiciling to avoid the Investment Canada Act isn’t practical for established companies with operations and a significant workforce in Canada. 

Companies would be subject to the ICA if they have full-time or part-time employees in Canada, including management, even if they move to another jurisdiction.   

That could be a deal breaker for some executives who don’t want to uproot their lives or their families. 

Working with Canadian-based consultants and contract employees who don’t work exclusively for the firm could be a workaround. 

“Companies that are housed in Canada, run by Canadians, that have Canadian employees and operations in Canada, those are going to be more intertwined or interwoven into Canada, so it’s going to be a lot harder to fully move outside of the jurisdiction,” McMillan’s Jarvis said. 

For publicly listed companies, redomiciling will also require shareholder approval. 

In some cases where a stock has had a big runup, redomiciling could trigger capital gains for shareholders that are taxable, Fasken’s Turner said. 

“A lot of the critical minerals stocks have been beaten up over the last couple of years, so that may actually make it easier for some of these companies to move,” Turner said. 

The company will also need to consider tax implications. In Falcon Energy’s case, for example, the UAE has double taxation and bilateral investment treaties with Guinea, where its Lola graphite project is located.  

Regulatory authorities on both sides will need to approve the move. That included the TSX for Falcon, as it remains listed on the TSX Venture Exchange. 

Falcon’s Bos advises companies will need a good law firm that has experience in both jurisdictions. 

He also notes that some jurisdictions are more compatible than others.   

“If we were to move to France, it’s a different legal system, legal framework that would make regulation there while maintaining a TSX listing much more challenging,” he said. “This was a relatively smooth process because both legal systems are compatible.” 

— This story was updated on July 26 to add comments from TMX Group.

Graphite One CEO Anthony Huston calls this deal “a historic moment” as it is the first synthetic graphite supply agreement between a US graphite developer and a US EV company.

Under the agreement, Graphite One will provide Lucid with 5,000 tonnes of battery-ready anode material per year. The initial term is for five years. Sales are based on an agreed price formula linked to future market pricing.

“Subject to project financing required to build the AAM facility, the supply agreement with Lucid puts Graphite One on the path to produce revenue in 2027,” Huston said in a statement.

“… And that’s just the beginning for Graphite One as we work to meet market demands and create a secure 100% US-based supply chain for natural and synthetic graphite.”

Manufacturing site

The agreement follows the company’s selection of a site for its proposed AAM facility in March of this year.

The location, a brownfield site in Warren, Ohio, previously used for storage of National Defense Stockpile critical minerals by the US government, is located in the heart of the automobile industry, in an area with ample low-cost electricity produced from renewable energy sources.

The site’s existing power lines are sufficient for Graphite One’s Phase 1 production target of 25,000 tonnes per year of battery-ready anode material, and land is available for follow-on phases to ramp to 100,000 tonnes per year of production.

The lease term is for 50 years, with an option to purchase. Construction of the Phase 1 facility is expected to begin within 36 months, with an estimated cost of $435 million.

The company anticipates that the Ohio facility will manufacture synthetic graphite anode active materials. Production of natural graphite anode active materials will be added as soon as feedstock from its Graphite Creek project near Nome, Alaska, becomes available.

Large graphite resource

The Graphite Creek project, located on the Seward Peninsula of western Alaska, is the site of the largest graphite deposit in the country as estimated by the US Geological Survey.

According to company estimates, the deposit contains 32.5 million tonnes of measured and indicated resources grading 5.25% Cg (graphitic carbon) for 1.7 million tonnes, and 254.7 million inferred tonnes at 5.11% Cg for 13 million tonnes.

A pre-feasibility study outlined a graphite mine with a 23-year life and a manufacturing plant originally planned in Washington state with a 26-year operating life. The project has an initial capex of $1.1 billion, an after-tax net present value (at 8% discount) of $1.3 billion and an internal rate of return of 22%.