Armadale Capital provides exposure to the rapidly expanding graphite market through its 100% interest in the Mahenge Graphite Project in Tanzania.
Graphite is the most stable form of carbon under standard conditions. Graphite occurs in metamorphic rocks as a result of the reduction of sedimentary carbon compounds during metamorphism.
Its four main properties are:
It is an excellent electrical conductor
It forms extremely strong cohesive bonds
It is heat resistant to 3,000ºC
It is resistant to solvents, dilute acids and fused alkalis.
These widespread properties have seen demand increasing rapidly, with the major uses being refractories for steelmaking, batteries, expanded graphite, brake linings, foundry facings and lubricants. Besides these rather traditional uses there is a wealth of emerging applications including lithium-ion batteries, fuel cells, pebble bed nuclear reactors, ceramic armour tiles and a variety of special applications of graphene in the high-tech industry, which will lead to a greatly increased demand.
Increasing demand for electric vehicles which could reach >5 million by 2020 (from <1 million in 2015) Further demand for energy storage units to enable the use of power generated by solar/wind during off-peak periods More than a dozen new lithium-ion giga-factories underpinning 200GWh expansion by 2020 Implies 400kt ‘spherical graphite’ needed – or 800kt feedstock if yield is 50% and all naturally sourced
Used in electronic products like smart phones/tablets
Graphite paper sheet
Used for sealing gaskets, tapes and packing
For flammable retardant materials
Used in numerous ways including electronic, medical, chemical and industrial processes
The demand for lithium-ion batteries to power automobiles is likely to be one of the biggest growth areas for graphite. It is well known that Tesla is building a new US$5 billion lithium-ion battery factory that could potentially increase natural graphite demand by 37% by 2020. The planned output from the new factory, commencing production in 2017, is 35 gigawatts per hour/year in lithium-ion batteries by as early as 2020, which would more than double the size of the current market. In addition, LG Chem and Foxconn are both building battery super plants. With a lithium-ion battery using around ten times as much graphite as lithium, graphite demand for batteries is expected to grow at around 15% per year.
It has been calculated that the Tesla plant alone will consume 28,000tpa of spherical graphite when operating at full capacity. This equates to between 40,000 and 93,000 tonnes of flake graphite if produced to today's standards which has raw material wastage of up to 70%.