Investments Ramp Up for Graphite Mining Outside China

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Researched by Industrial Info Resources (Sugar Land, Texas)--For decades, graphite has been an indispensable element in a wide range of industries, with its applications spanning from steel production to electronics. However, in recent years, graphite has become vital in the clean energy transition, earning recognition as a critical material by the U.S. Department of Energy in 2023, further amplifying its significance in addressing climate change goals.

As the automotive industry transitions toward electrification to reduce carbon emissions, the demand for graphite used in battery anodes is expected to soar in the coming years. In electric vehicles (EVs) alone, 95% of anodes used in lithium-ion batteries are made from graphite. Each plug-in EV requires around 70 kilograms (kg) of graphite, while hybrids typically utilize 10 kg.

In addition, large-scale energy storage systems are also driving significant demand for graphite, particularly in redox flow batteries where graphite felt serves as a crucial electrode material. As renewable energy integration and grid stability needs grow, graphite demand in energy storage is expected to rise.

Moreover, graphite is still an essential component in steel production, refractories (heat resistant materials), and lubricants, and remains in strong demand in these traditional sectors as well.

Despite the growing demand for graphite across multiple sectors, the global supply of graphite remains constrained. Union Bank of Switzerland (UBS) predicts that the demand for natural graphite will increase sixfold during this decade, reaching 6.3 million tonnes annually, and anticipates a deficit emerging from 2025 onwards.

The majority of graphite production is concentrated in a few countries, with China being the largest producer and exporter. However, concerns regarding supply security remain as China's recent restriction on graphite exports have prompted other nations to explore domestic graphite production.

Industrial Info is tracking about 120 active graphite-mining projects, with spending worth more than US$9 billion. Around 78% of the total spending is geared at grassroot projects, while plant expansions account for 16%.

By region, North America accounts for the biggest share in the global market, with investments worth US$4.34 billion. Canada accounts for 64% of the total investments in the region, followed by the U.S. which accounts for approximately 35%.

Africa follows closely with investments worth US$3.10 billion, with Tanzania as the leading investor with spending worth US$1.41 billion. Other notable investors in Africa are Mozambique and Madagascar with investments worth US$500 million, and US$424 million, respectively.

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Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 trillion (USD).