10 Percent of Flake Graphite Supply Taken Off Market

Industrial Minerals’ Simon Moores reported that as many as 55 graphite miners and processors in the Chinese town of Pingdu have been ordered to stop producing flake graphite on environmental grounds.

The stoppage is expected to remain in place until June 2014, “or until the companies can prove an acceptable standard of environmental controls,” and will take 10 percent of the world’s flake graphite supply off the market. That’s equal to 20 percent of China’s domestic production.

As quoted in the market news:

The action is seen as the first step in revolutionising the country’s flake graphite industry which has gone untouched since the 1980s.

The region and the country’s graphite industry is in need of modernisation. China sees an opportunity to turn itself into a production powerhouse of value-added, hi-tech carbon products to complement some of the richest graphite resources in the world.

This move by the local government is a step change in the way it is approaching the industry. Until now, officials used to turn a blind eye to producers that fell below environmental standards because they relied on these companies for tax.

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