Even when you own a majority of the graphite mines in your country, it doesn’t mean that finding new graphite veins gets any less exciting.
Such is the case for Ceylon Graphite Corp. (CANADA: CYL) (U.S.: CYLYF) (EUROPE: CCY). Right as business activities have finally returned to the levels that the company had initially planned to achieve before COVID-19 disrupted, Ceylon has discovered new graphite veins from its H1 site.
The H1 site is the third addition to Ceylon’s collection, joining the likes of K1 and M1. Samples from the 60–meter drilling are currently in the hands of the Geological Survey and Mines Bureau (GSMB) for testing.
Sri Lanka’s GSMB division has renewed the industrial mining license for Ceylon and, following this, CYL has made significant improvements to its K1 site. Primary among them was the extension of the primary mine shaft by 60ft; this makes excavating the graphite a lot easier and less time-consuming, which is key for ramping up production.
Who doesn’t want to see ramped-up production of the world’s lowest cost, purest graphite?
To top it all off, if extending K1 wasn’t enough, Ceylon has purchased a brand new hydraulic underground core drilling rig, which greatly accelerates production throughout all kinds of rigid landscapes.
“We are very excited with this new graphite vein discovery at our H1 site on our first holes, which continues to demonstrate the abundance of vein graphite on our properties and the effectiveness of our exploration methodologies,” stated Bharat Parashar, Chairman and CEO. “With our recent exploration success and continued ramping up of operations, Ceylon is rapidly advancing towards its goal of becoming a leading producer of high-grade, environmentally friendly, natural graphite and a vertically integrated advanced material and technology company.”
What’s the Deal with Graphite?
The need for high-quality graphite is steadily increasing as companies like Tesla and General Motors continue their massive plans to deploy near-startling amounts of EVs. When it comes to producing the anodes of lithium-ion batteries and energy storage, graphite is considered an essential material for these processes.
Wondering how to quantify this demand increase? Look no further.
125,000,000. That’s how many electric vehicles earth could see on its roads in less than a decade. That‘s going to require a lot of graphite, and the world is already undergoing a supply shortage. It’s no wonder the United States Geographical Survey (USGS) has included the battery metal on a list of 35 minerals and metals that are considered critical in the United States.
The graphite market alone was worth US$19.1 billion in 2019 and is expected to nearly double by 2030, with projections of the graphite market reaching as high as US$36.88 billion, according to P&S Intelligence.
When commodities, as a whole, are set to see explosive growth due to economic conditions, it’s no surprise that a battery metal that is needed to produce one of the biggest growing trends of the decade (electric vehicles), will be riding that wave.
Just ask Doug King.
“Stretched supply chains will bolster raw materials,” said Doug King from the Merchant Commodity Fund. “They’re probably way longer than they’ve ever been in the past 20 years because of congestion, paperwork, trade disputes and other hurdles. That’s inflationary because people need to hold much more inventory, increasing demand, and that will support all commodity markets over the next cycle, which is only just starting. That is the change that I think is going to propel us to maybe some exciting times.”
So Why Are We Specifically Focused on Ceylon?
Simple: Ceylon is exploring and producing graphite in the historic resource jurisdictions within Sri Lanka, home of the world’s purest graphite. Ironically enough, the title of “world’s purest” doesn’t come with a hefty price tag. At $200/ton, cost is an advantage for Ceylon, especially when compared to its peer, Syrah Resources, which carries a cost of $700/ton.
A few key aspects of Ceylon’s position in this booming industry:
- It holds a land package of historic vein graphite deposits sprawling over 121 square kilometers.
- These vein deposits are distinct, with a higher margin product. Making up less than 1% of the current world graphite production, the deposits aren’t easy to get your hands on.
- The process in which Ceylon excavates, processes and produces its world-class graphite is cost-effective, and speedy. This is accentuated by the improvements made to K1, as seen earlier in this article.
- The global supply–on–hand of graphite is currently miniscule, compared to demand.
- The company is positioned super well geographically, with easy access to the Eastern markets of China, Japan, Korea, and not far from the U.S. and Canada.
Recently, Ceylon announced they had opened an office in the UK. The main driving force behind this location is the UK’s reputation as the leading global research and technology advancement in graphite applications. Dr. Siva Bohm and Dr. Malika Bohm, Ceylon’s Chief Science Officer and Technical Director respectively, both work out of this office.
While the Bohm’s are busy developing new patents for the use of graphite and graphene in many applications, including construction materials, healthcare applications and anode upgrades, the rest of the team is building out its production facility in Sri Lanka.
“We see significant opportunity and definite need for our high-grade vein graphite to supply Lithium-Ion battery manufacturers in both UK and Europe”, said the Bharat Parashar, Chief Executive Office and Chair of the Board of Directors. “By being resident in-market we can more easily be directly involved in anode advancement for the EV and energy storage markets and work with our own scientists as well as government and other private sector researchers on innovative applications for graphite and graphene.”
Disclaimer: Ceylon Graphite Corp is an Edge Communications Client, and we own shares in the company.