Media

[JNRB]

Saudi Arabia studies graphite, rare earths trading platform – minister

The Kingdom has been studying setting up the trading platform for the past three months and it does not expect a decision to be made before the next six.

www.mining.com

MT has often talked about the challenges of pricimg graphite/anode vs commodity materials because there is no standard spec and no exchange. Seems the Saudis have decided to see if they can fill that space .

 

[brewm0re]

As I was looking through documents for updates to the planned timelines, I’m happy with commentary from Per-Erik, where he’d stated confidence in 2025 for anode production. I couldn’t find the exact thread/article I was after, but happened to stumble on this whilst scouring the net.

Following from DAH’s important post regarding personnel within our latest ANN, seeing this clip (from PEL’s time @ LKAB) reinforces he is a tremendous member of the TLG management team. The passion and experience is clearly evident. Enjoy, the “treasure hunting” is so close in finally being able to start digging it up!

 

[brewm0re]

As I was looking through documents for updates to the planned timelines, I’m happy with commentary from Per-Erik, where he’d stated confidence in 2025 for anode production. I couldn’t find the exact thread/article I was after, but happened to stumble on this whilst scouring the net.

Following from DAH’s important post regarding personnel within our latest ANN, seeing this clip (from PEL’s time @ LKAB) reinforces he is a tremendous member of the TLG management team. The passion and experience is clearly evident. Enjoy, the “treasure hunting” is so close in finally being able to start digging it up!

 

[DAH]

Hope this link works. It was posted over at HC a few days ago. Worth a watch IMO for those that haven't checked it out. Nothing TLG specific but all very relevant. Also a nice reminder that we're investing into a great company at the forefront of a cleaner future.

 

[WheresTheMonkey]

An interesting commentary extracted from Renascor's (ASX:RNU) latest announcement 17 January......

Renascor does not consider current graphite pricing to be sustainable. The current decrease in synthetic graphite pricing has occurred during a period of low power and coke feedstock costs, as well as low utilisation rates of Chinese graphitization capacity following significant capital investment in the Chinese synthetic graphite sector in 2022 . This has led to aggressive pricing competition amongst Chinese synthetic producers.

Renascor expects that, as utilisation rates increase and Chinese battery demand continues to grow, synthetic graphite pricing will increase, supporting higher prices for natural Graphite Concentrates. Renascor also expects that support for new sources of graphite will improve as the demand for lithium ion battery anodes and graphite continues to increase, with recent policy initiatives potentially accelerating the development of secure ex-China graphite supply.

Recent legislation, such as the US Inflation Reduction Act (IRA), isincentivizing the growth of new ex-China supply, with the IRA requiring that from 2025 all graphite and other critical minerals used in the manufacture of electric vehicles must be from sources outside of China9 to qualify for the full electric vehicle tax credit in the United States10.

The importance of new ex-China supply sources has been further underscored by recently announced restrictions on the export of graphite products from China, with effect from 1 December 2023. These restrictions have the potential to limit the ability of non-Chinese companies, including anode manufacturers, to source graphite material from their traditional Chinese supply source. In view of the potential for a near-term shortfall in graphite supply and increase in graphite prices, Renascor continues to advance planning for the first phase of production of Graphite Concentrates to minimise the planned construction period.

 

[WheresTheMonkey]

The current decrease in synthetic graphite pricing has occurred during a period of low power and coke feedstock costs, as well as low utilisation rates of Chinese graphitization capacity following significant capital investment in the Chinese synthetic graphite sector in 20228 . .

Now can someone answer this question ?

It has always been my understanding that only Natural Graphite can be spherised/shaped. But in a pod cast someone posted over at the Toilet Bowl one of the two commentators I'm sure said that China was producing spherised synthetic.

Do/Can they ?

 

[WheresTheMonkey]

Now can someone answer this question ?

It has always been my understanding that only Natural Graphite can be spherised/shaped. But in a pod cast someone posted over at the Toilet Bowl one of the two commentators I'm sure said that China was producing spherised synthetic.

Do/Can they ?

Interesting article on USA pricing from August and the answer to my question

North American graphite market to disconnect from Chinese prices

North American graphite producers cannot compete with the maturity of the Chinese market and expect prices to be significantly higher during startup.

www.spglobal.com

• 15 Aug, 2023

​

North American graphite market to disconnect from Chinese prices​

Bagged graphite from Syrah Resources' Balama project in Mozambique. Syrah CEO Shaun Verner recently said that China is setting up the market for unsustainably low graphite prices. Source: Syrah Resources Ltd.

North American battery manufacturers will pay substantially more to get their hands on local graphite supply as producers face higher production costs and more demand for lower-carbon products, according to industry participants.

Battery manufacturers are currently dependent on China for graphite, as the country extracts around 70% of the world's natural graphite and controls almost 100% of the refining process, according to the International Energy Agency. Governments are pushing for the electric vehicle supply chain to be localized to remove the geopolitical risk of a Chinese monopoly, and at the same time, many consumers want a supply chain meeting higher standards for environmental, social and governance issues.

Several new graphite projects have emerged to fill the gap, but a budding North American market will not be price competitive against a mature Chinese market, executives from junior graphite explorers and miners told S&P Global Commodity Insights.

"You will see a major disconnect in the future between pricing in North America and China," Eric Desaulniers, president and CEO of Nouveau Monde Graphite Inc., told Commodity Insights. "We expect, in the future, the customer will be willing to pay a premium compared to China of between 30% and 50%."

Graphite comprises most of the anode component of lithium-ion batteries, with few alternatives expected to be commercially available before the end of the decade. A boom in EV sales is expected to help raise graphite demand by more than four times by 2030 as compared to 2022, according to International Energy Agency forecasts.

Higher capital costs
The price of battery carbon materials, including battery-grade graphite, that were imported into the US in May averaged $5,328.73 per metric ton, data from S&P Global Market Intelligence shows. That is a 25.9% decline from January and a 29.9% drop from the 2022 high that was recorded in July of that year.

Nouveau Monde Graphite expects the price of battery-grade graphite in North America to be between $8,707 and $10,874 per metric ton over the life of its integrated graphite development in Quebec, according to an August 2022 feasibility study that cites forecasts from Benchmark Minerals. The company's integrated project comprises the Matawinie graphite mine and the Becancour VAP battery material plant.

North American producers emphasized the need for a graphite price that covers capital costs as they work to get off the ground.

"The conversation that I have with my customers is, 'I understand my price is high, but I have to invest $1.4 billion to produce that graphite if you want it available in 2026,'" Northern Graphite Corp. CEO Hugues Jacquemin told Commodity Insights. Northern Graphite owns the preproduction-stage Bissett Creek project in Ontario and the Lac des Iles mine in Quebec.

"If they're not willing to pay a price between $9,000 and $12,000 per ton for the material, there is no way we can justify the capital to produce the material," Jacquemin added.

The US government has released a slew of initiatives such as the Bipartisan Infrastructure Law and the Inflation Reduction Act as "essential first steps" to support the industry's growth, but "China has had a 20-year head start," a representative from Novonix Ltd. told Commodity Insights in an email response.

The US should reimplement the 25% tariff on Chinese graphite imports that was waived in 2020, the representative said.

"The cost of capital for a new industry is inherently higher in North America than that of which is already established in China," the representative added. "Manufacturers in China do not face the same environmental and permitting challenges and have different cost structures that impact how quickly new plants can start production as well as the materials used in the production process."

Novonix produces synthetic graphite, and the company has operations in the US and Canada.

Artificial vs. natural graphite
Battery-grade graphite, or coated spherical graphite, can be made using artificial and natural graphite. The US imported natural graphite at a price of about $2,135/t and artificial graphite at $5,464/t in May, according to Market Intelligence data.

Natural and artificial graphite prices have not been immune to a slow recovery of Chinese demand after the government canceled its EV subsidy program at the end of 2022. Prices also face pressure from the growing capacity of artificial graphite production in China.

Chinese artificial graphite producers are using "aggressive and, in our view, unsustainable behavior" to put pricing pressure on natural graphite producers when recovering EV sales will "require higher prices to incentivize increased production," Syrah Resources Ltd. CEO Shaun Verner said July 18 during a second-quarter earnings call.

Syrah Resources' Balama mine in Mozambique hosts the world's second-largest reserves and resources, containing an estimated 120.1 million metric tons of natural graphite, Market Intelligence data shows.

Most battery producers mix the two graphite types as artificial graphite has a longer life cycle, and natural graphite offers greater energy density.
However, China's graphite industry may fall short, as consumers increasingly demand a more transparent and sustainable battery supply chain. The artificial form of graphite is primarily produced using needle coke, a byproduct of the oil refining process, and China primarily produces it at plants running on coal-fired electricity, said Robert Pell, founder and CEO of Minviro. Minviro is an environmental consultancy that undertakes life cycle assessments for the mining industry.

Processing synthetic graphite requires three times the amount of energy that natural graphite processing requires, according to data from Market Intelligence. The energy intensity of the synthetic material usually drives up costs, but China offers subsidies on energy, industry participants said. "That is embedded in those final products," Pell said.

Paying the premiums
Producing natural or synthetic graphite in North America and processing it will require buyers to pay a premium for ESG compliance, localization and logistics, according to Nouveau Monde Graphite's Desaulniers, who expects sales to be made primarily through long-term contracts.

Graphite is only 9% of the total cost of the battery, Desaulniers said. Executives are confident customers will be willing to pay the difference for locally made graphite that meets higher ESG standards.

"Even if the graphite prices triple, it still would have a very small impact on the overall cost of the battery," Jacquemin said.

The Inflation Reduction Act is expected to help support the local graphite industry by offering a tax credit of up to $7,500 to consumers who purchase an EV that uses a certain amount of materials produced domestically or from partners that have free-trade agreements with the US.

"If I just take the portion of that tax credit that relates to graphite and I turn it into a $1-per-kilogram premium, the reality is that gives me a cushion of maybe $1 to $2 per kilogram that I can charge as a premium versus the Chinese," Jon Jacobs, chief commercial officer of Westwater Resources Inc., told Commodity Insights. "Now I'm in business."

Westwater owns two graphite projects in Alabama, known as Coosa and Bama.

The outcome of talks between buyers and producers is expected to set up the market for several years. "We need to not only create projects but create the market, and create a pricing [index] outside China," Desaulniers said.

S&P Global Commodity Insights produces content for distribution on S&P Capital IQ Pro.

 

[Semmel]

Now can someone answer this question ?

It has always been my understanding that only Natural Graphite can be spherised/shaped. But in a pod cast someone posted over at the Toilet Bowl one of the two commentators I'm sure said that China was producing spherised synthetic.

Do/Can they ?

Hey WTM, natural graphite normally comes in all sorts of sizes and shapes when you dig it out of the ground. That has to be filtered and grinded to become uniform size, but it doesn't have good shape after that. The shaping is then done in the spherification step. After that, it's coated.

Synthetic is grown from the feedstock, it is a crystal and grows like one. You can control the size and shape during the growing process. So it poops out as special graphite already. Of yourse if the crystals that are grown are to spiky, they need to be spherificated as well, not sure if that's necessary though. There is nothing preventing you to do this step, it's just unnecessary (to my understanding). After that synthetic too, is coated.

So natural and synthetic are at the same level after spherification for natural; and crystal growth for synthetic. And that material is called spherical graphite.

PS:
Interesting article you posted! Thx!

 

[WheresTheMonkey]

PS: Interesting article you posted! Thx!

It is a very interesting article. I especially liked this bit

Manufacturers in China do not face the same environmental and permitting challenges and have different cost structures that impact how quickly new plants can start production as well as the materials used in the production process."

Cheap cost structures and highly damaging to the environment

Europe faces the same challenges but I think the EU political circle and industrial circles know that but for the Americans the industry knows it but then every 4 years …….

“The Coldest Wind sometimes come in November “

 

[WheresTheMonkey]

@Gero could you post the above article over at the “Toilet Bowl” but tag it to the magnificent Gvan’s response on Thursday night as it kind of highlights that the DFS sale price won’t be too far off per his post.

It supports Gvan’s post

I don’t think we will get the DFS prices but we will be maybe 10% down for the time being

 

[DAH]

@Gero could you post the above article over at the “Toilet Bowl” but tag it to the magnificent Gvan’s response on Thursday night as it kind of highlights that the DFS sale price won’t be too far off per his post.

It supports Gvan’s post

I don’t think we will get the DFS prices but we will be maybe 10% down for the time being

You might be right re pricing, But I think we can safely assume the majority of customers servicing the EU will want locally sourced high ESG anode, and there's clearly not enough to go round... so let the bidding war begin! And year 1 is year 1, what about 5, 10 years from now... new chapter incoming. Cheers for the article.

 

[WheresTheMonkey]

You might be right re pricing, But I think we can safely assume the majority of customers servicing the EU will want locally sourced high ESG anode, and there's clearly not enough to go round... so let the bidding war begin! And year 1 is year 1, what about 5, 10 years from now... new chapter incoming. Cheers for the article.

It depends on whether they really want to save the entire planet ………or just their little section of it

And yes wait for the TLG expansion

 

[curiousmagpie]

I wish I shared this optimism about pricing premium, but until I see evidence of someone actually paying a premium I won’t believe it. It’s nice that all these graphite company CEOs are hoping people pay more but commercial reality still reigns supreme and everything else is all talk.

Example from the afr earlier this week in Nickel that could equally apply to graphite. They want cheap graphite.

Australia is ‘no longer competitive’ in nickel: producer

Nickel Industries boss Justin Werner says the “unfortunate truth” is that this country’s miners are no longer competitive. His ASX-listed group operates in Indonesia.

www.afr.com

Even if the EU are making the right noises, it needs to be backed up with action fast otherwise China’s dominance will be unassailable.

 

[WheresTheMonkey]

Even if the EU are making the right noises, it needs to be backed up with action fast otherwise China’s dominance will be unassailable.

BHP are getting out of nickel because they cannot compete with Indonesia, Australian mines sometimes cannot compete with the World

Personally I think BHP can’t be bothered with a small profit centre they need massive scale.

South 32 will probably buy it since they already have all the other BHP legacy mines

ANYWAY

China wants to be the “Amazon of the World”

Pre Covid………..it was going that way

I really think that the West is slowly waking up

The EU and USA will lose its heavy manufacturing including car industries if the China supply chain is not broken

= EU election bloodbath

Economics is the most powerful weapon the West has against China since, except for the USA, all our militaries are so run down

Even the USA “can’t plug the dam” militarily

I don’t share your China dominance thingy

I think within around 10 months there will be some more EU policy developments

Before even considering CRMA

It’s not the EU I’m worried about it’s the rest of the West

I’m not Tigmeister by the way

 

[DAH]

I wish I shared this optimism about pricing premium, but until I see evidence of someone actually paying a premium I won’t believe it. It’s nice that all these graphite company CEOs are hoping people pay more but commercial reality still reigns supreme and everything else is all talk.

Example from the afr earlier this week in Nickel that could equally apply to graphite. They want cheap graphite.

View attachment 54718

Australia is ‘no longer competitive’ in nickel: producer

Nickel Industries boss Justin Werner says the “unfortunate truth” is that this country’s miners are no longer competitive. His ASX-listed group operates in Indonesia.

www.afr.com

Even if the EU are making the right noises, it needs to be backed up with action fast otherwise China’s dominance will be unassailable.

Yep, fact is always better than fiction!
I do disagree though and time will tell...
It's not just an ESG issue, likely more so a supply control issue. Europe don't want Chinese material, so eventually auto's will be forced one way or another to purchase local supply of NG Anode. The fact MT's phone started running hot after the Chinese ANN on export of NG controls suggests they're waking up. If 20 auto's supplying the EU want to decrease their exposure to China they need to agree on a price and no way TLG (and others) will sell at China prices. The auto either walks away or negotiate a premium price. Supply vs demand would appear very favourable to Talga (not the prospect).
I don't know much about Nickel, but I think it's an apples v oranges comparison with NG Anodes and the fact China has such a stranglehold. TLG customers will want to be locking in long term contracts for local NG Anode. If they are unreasonable with MT, they might get nothing. And the irony is IMO that if they continue to use China to get a lower price they likely risk their end customer missing out on a substantial tax credit, and there's no vehicle purchase (in addition to being challenged on why they use China). A tax credit alone is far more significant than a slightly higher price for Anode. The recent Reuters article quoted an MG exec saying they cannot compete. I could well be wrong, but it doesn't add up for me. Exciting times ahead!

 

[WheresTheMonkey]

@Gero could you post the above article over at the “Toilet Bowl” but tag it to the magnificent Gvan’s response on Thursday night as it kind of highlights that the DFS sale price won’t be too far off per his post.

It supports Gvan’s post

I don’t think we will get the DFS prices but we will be maybe 10% down for the time being

Thanks @Gero

 

[WheresTheMonkey]

Chinese Exports of Battery Material Graphite Plunge on Controls​

• Natural graphite shipments slump 91% in December from November
• Curbs viewed as Beijing’s response to Western trade barriers

Chinese Exports of Battery Material Graphite Plunge on Controls

China’s exports of natural graphite, a material used in electric vehicle batteries, plummeted in December after Beijing imposed controls at the start of the month, tightening its grip on the supply of minerals vital to advanced manufacturing.

www.bloomberg.com

http://bloom.bg/dg-ws-core-bcom-m1
By Bloomberg News
January 22, 2024 at 1:31 PM GMT+11

China’s exports of natural graphite, a material used in electric vehicle batteries, plummeted in December after Beijing imposed controls at the start of the month, tightening its grip on the supply of minerals vital to advanced manufacturing.

Overseas sales plunged 91% month-on-month to 3,973 tons, according to Chinese customs data, after a rush to buy ahead of the deadline saw them surge to more than 45,000 tons in November. Exports had averaged about 17,000 tons a month in the year through October.

The export restrictions are generally viewed as Beijing’s response to trade barriers raised on Chinese products by Western nations. They apply to materials deemed highly sensitive as so-called dual-use items, a reference to military applications. The curbs were announced just days after the US stepped up efforts to keep advanced semiconductor chips out of China.

Exports of synthetic graphite, which aren’t subject to the curbs, fell 28% to 39,763 tons last month.

The commerce ministry flagged in the middle of December that some graphite export applications had been approved.

Sales should slow notably from December to the Lunar New Year holidays, which fall in mid-February this year, as government approvals take quite a long time, Shanghai Metals Market said last week, citing its survey of domestic producers. Overseas demand also usually weakens toward the end of the year, and that was particularly the case after purchases ramped up in November, it said.

Chinese shipments of two other critical minerals — germanium and gallium — also continue to be affected by separate controls imposed earlier in the year on national security grounds. Germanium exports jumped more than four times to 3.36 tons in December from the month before, while overseas sales of gallium surged to 7.03 tons from 1.53 tons.

The minerals are used to make parts for chips, telecommunications equipment and electric vehicles. Some 94 tons of gallium and 44 tons of germanium were exported by China in 2022.

 

[anbuck]

Chinese Exports of Battery Material Graphite Plunge on Controls​

• Natural graphite shipments slump 91% in December from November
• Curbs viewed as Beijing’s response to Western trade barriers

Chinese Exports of Battery Material Graphite Plunge on Controls

China’s exports of natural graphite, a material used in electric vehicle batteries, plummeted in December after Beijing imposed controls at the start of the month, tightening its grip on the supply of minerals vital to advanced manufacturing.

www.bloomberg.com

http://bloom.bg/dg-ws-core-bcom-m1
By Bloomberg News
January 22, 2024 at 1:31 PM GMT+11

China’s exports of natural graphite, a material used in electric vehicle batteries, plummeted in December after Beijing imposed controls at the start of the month, tightening its grip on the supply of minerals vital to advanced manufacturing.

Overseas sales plunged 91% month-on-month to 3,973 tons, according to Chinese customs data, after a rush to buy ahead of the deadline saw them surge to more than 45,000 tons in November. Exports had averaged about 17,000 tons a month in the year through October.

The export restrictions are generally viewed as Beijing’s response to trade barriers raised on Chinese products by Western nations. They apply to materials deemed highly sensitive as so-called dual-use items, a reference to military applications. The curbs were announced just days after the US stepped up efforts to keep advanced semiconductor chips out of China.

Exports of synthetic graphite, which aren’t subject to the curbs, fell 28% to 39,763 tons last month.

The commerce ministry flagged in the middle of December that some graphite export applications had been approved.

Sales should slow notably from December to the Lunar New Year holidays, which fall in mid-February this year, as government approvals take quite a long time, Shanghai Metals Market said last week, citing its survey of domestic producers. Overseas demand also usually weakens toward the end of the year, and that was particularly the case after purchases ramped up in November, it said.

Chinese shipments of two other critical minerals — germanium and gallium — also continue to be affected by separate controls imposed earlier in the year on national security grounds. Germanium exports jumped more than four times to 3.36 tons in December from the month before, while overseas sales of gallium surged to 7.03 tons from 1.53 tons.

The minerals are used to make parts for chips, telecommunications equipment and electric vehicles. Some 94 tons of gallium and 44 tons of germanium were exported by China in 2022.

Not sure how much to trust this article when I believe it is incorrect about synthetic graphite not being subject to China's new export permit rules.

 

[WheresTheMonkey]

Not sure how much to trust this article when I believe it is incorrect about synthetic graphite not being subject to China's new export permit rules.

That's what I thought. A curious thing to get wrong

Announcement on the Optimisation and Adjustment of Temporary Export Control Measures for Graphite Items – Policies - IEA

Announcement on the Optimisation and Adjustment of Temporary Export Control Measures for Graphite Items - policy from the IEA Policies Database.

www.iea.org

Announcement on the Optimisation and Adjustment of Temporary Export Control Measures for Graphite Items​

​

Last updated: 8 December 2023

• CountryPeople's Republic of China
• Year 2023
• StatusIn force
• JurisdictionNational

On 20 October, China’s Ministry of Commerce (MOFCOM) of China and the General Administration of Customs (GAC) announced that certain graphite products would require export permits to protect national security, effective from 1 December 2023. Applications for export permits must be submitted to the MOFCOM through provincial commerce authorities, and exporters will need to renew their licenses every 6 months.
The policy formally includes “highly sensitive” graphite products to the export control list. These products encompass:

• high-strength, high-purity, high-density synthetic graphite materials and products.
• natural flake graphite products including spherical graphite and expanded graphite.

 

[curiousmagpie]

I've seen this repeated in a few places about synthetic graphite being excluded from the ban - the IEA is a great source to have thanks.