To stay ahead in a fast-changing industry, carmakers have been investing directly in mining projects to ensure future supplies of the battery inputs.
But building mines takes between five and 10 years, meaning China will keep its lead in supplying graphite for at least half a decade, miners in other countries say, as those projects are mostly still in pre-production.
“What China is saying to the West with this decision is that we are not going to help you make electric cars, you have to find your own way to do that,” Northern Graphite CEO Hugues Jacquemin said.
China’s move took multiple sectors by surprise, with some end-users fearing more curbs could follow.
“We see China’s move as a potential catalyst to highlight the urgency of improving domestic graphite supply,” said John DeMaio, president of Graphex’s graphene division.
“We’ve aligned ourselves with several graphite miners outside of China. I would imagine this news will accelerate their plans to bring capacity online in the near term,” DeMaio said.
Graphex Group plans to open a graphite processing facility in Warren, Michigan, by the end of 2024 that aims to supply US automakers with at least 10,000 metric tons per year of the key metal, the largest component in an EV battery.
Commodity-producing and consuming giant China dominates other critical minerals including forms of refined cobalt, nickel and manganese as well as rare earths, a group of 17 elements used in products from lasers and military equipment to magnets found in electric vehicles, wind turbines, and consumer electronics such as iPhones.
“The battery controls a lot of the cost of a vehicle, so if carmakers outside of China are forced to use very expensive materials or can’t access them, … that is going to ramp up their prices or force them to purchase the batteries from Chinese battery manufacturers,” said Stefan Bernstein, CEO of GreenRoc Mining, owner of a graphite project in Greenland that is due to reach production in 2027.
Northern Graphite’s Jacquemin said the company had been getting calls from OEMs (Original Equipment Manufacturers) on what impact China’s latest move would have, concerned about supply security for batteries and other electronics equipment.
He said China’s move meant Northern Graphite could encourage investors to raise money to hit production by 2027.
Shishir Poddar, Executive Chairman of Tirupati Graphite, which has mining and processing operations in Madagascar and recently acquired two projects in Mozambique, said the import curbs will “further boost the development of ex-China graphite activities.”
