As we know, the world of electric vehicles is on center stage right now. Car-maker giants Volkswagen and General Motors are pouring billions of dollars into developing and rolling out plans to lay their own footprint on this hot, environmentally friendly sector
As the world fully dives into EV, the battery market is going to continue to become even more competitive. Battery prices have dropped dramatically since 2017 and are set to continue the trend as companies like Tesla begin producing their own at a lower average cost. As lithium sources have, for the most part, been spoken for, there is another battery metal that is starting to draw more eyes as the industry develops.
The metal in mind? Graphite.
Very good question, Mr. category headline. I’ll answer it for our readers.
Graphite is one of, if not the, most important component in any EV battery. Anywhere from 40-60% of a battery is composed of graphite.
Although China, producing 70% of the world’s graphite, tends to take over the market share with competitive pricing, Andrew Miller of Benchmark Mineral Intelligence (BMI) states that fighting China with low-level, low-cost is not part of the plan for graphite developers. Seeking out where they can add value and increasing processing abilities is the main focus for companies looking to take on China’s graphite market. It’s like taking market share from Walmart – you don’t fight them on cost, you find the niches that are being overlooked in their strategy.
BMI expects double-digit growth in battery demand, starting in 2022. Original Equipment Manufacturers (OEMs), who sign contracts to buy mass amounts of component materials from other organizations to make devices, have been paying close attention to the value of battery metals. The market continues to require more and more raw material as these OEMs continue to show commitment.
The long-term outlook for graphite is looking incredible due to projections of battery demand, as they remain heavily supported by stimulus and green energy incentives (thanks, Biden), and rightfully so; battery metals are due to become the largest sector of demand for the graphite supply chain globally. “Given the scale of investment provided by US policy stimulus targeting green energy (with electric vehicles at least for now the winning technology for low emissions), an element of uncertainty towards future growth in base metals markets has been alleviated,” Intl FCStone metals analyst Natalie Scott-Gray stated back in December. Many analysts expect to see a 1500% growth in battery demand over the next 10 years.
While both synthetic and natural graphite hold value for the flourishing battery market, natural graphite requires less processing to get it to its end point, thus decreasing the cost, environmental impact, and overall benefit for the future of the industry. Based on the lithium-ion-growth case by Miller, which states that lithium is set to grow from 200,000 tonnes a year to a whopping 3,000,000, the production of graphite for batteries should grow at a steady rate of 19% per annum. Ensuring that this industry is growing responsibly, with the most future-conscious plans in place is extremely important, increasing the need for natural solutions.
It is evident that our world is hastily evolving into a more environmentally conscious mindset with each passing year, so it’s no surprise that battery producers are looking to places other than China when it comes to their graphite supply chain. Eco-friendly purification methods and improved traceability are being emphasized to encompass the value chain for its significantly greener footprint, compared to its counterpart, synthetic graphite.
After all, the impact of electric vehicles is massively reduced when you aren’t accounting for the entire supply chain; simply driving the thing won’t be enough to change the world.
Let’s Break Some Ground
Let’s start with a definition: Mining grids are adjustments (calibrations) to regular map projections and are often used on mining and other special construction sites. Pseudonyms for ‘mining grids’ are ‘construction’, ‘local’ or ‘site calibration’ grids.
Ceylon’s subsidiary Sarcon Development owns 121 grids of land in Sri Lanka. One of the sites, known as H1, saw a sizable amount of quality vein graphite surfaced in 2019, found in depths ranging from 67 to 142 meters; back then, it was their largest sized vein to date. Due to the massive, recently discovered surface vein of high–grade graphite being in such close proximity to the new drilling site, Ceylon and its professionals are anticipating an even higher quality yield this time around. In Q3, Ceylon will also begin drilling in their next site, M1.
Ceylon is one of very few graphite companies that are currently on the market, and just happens to have the highest quality, lowest-cost natural graphite in the world. In fact, it is only on Sri Lanka that vein graphite is actively mined.
Vein graphite stands as the highest quality and commercially viable type of natural graphite. With a lower processing cost and same commercial benefit than “flake” graphite, amorphous graphite, and synthetic graphite, vein graphite only occurs in solid lumps, making the yield process significantly easier.
Given that the drill programs at Ceylon’s mines in Sri Lanka range from 30-400 meters deep, it is with confidence that Ceylon will own access to a vast majority, if not all of Sri Lanka’s precious metal.
Timing. Forecasted growth of demand. Geographic placement. Drilling site monopoly. We hope you are starting to see the picture!
Disclaimer: Ceylon Graphite Corp is an Edge Communications Client, and we own shares in the company.