The US currently produces no graphite, and many are wondering if graphite mining in the US will happen. Here’s an overview of the situation.
The established of a US graphite mining industry has enjoyed increased interest in recent years thanks to expected growth in demand for electric vehicles.
China is the top producer of graphite by far, and it’s not particularly easy — or desirable — to invest in companies mining graphite there.
Many investors are instead looking to North America for graphite opportunities, especially since Tesla’s (NASDAQ:TSLA) announcement that it plans to source the lithium, graphite and cobalt it needs for its Nevada-based gigafactory from companies working on the continent. In 2015, Tesla backed up that statement by signing two lithium supply deals with companies whose projects are in North America.
But while investors are keen to take stakes in North America-focused graphite companies, there are very few companies actually producing graphite in the region. In fact, in 2020 of the North American countries only Canada (10,000 MT) and Mexico (8,000 MT) produced graphite, accounting for a combined 2 percent of global supply, while the US produced none at all.
Market watchers are wondering whether a US graphite mining industry will rise to meet the region’s demand, and in particular whether graphite mining in the US will ever happen. Here’s a look at the history of US graphite production and what may be next.
US graphite mining: Lack of supply
Graphite is deemed a critical material by the US, and about a century ago it was mined abundantly in the country, mostly in Alabama. However, according to a report from the US Geological Survey, graphite mining in the US has long since stagnated. In fact, the metal has not been mined in the country since 1990, when United Minerals suspended operations at its graphite mine in Montana.
As a result, the US now imports all of the graphite it requires. In terms of domestic demand, the US Geological Survey reports that in 2020, 95 US firms consumed 35,000 tons of natural graphite valued at US$21 million.
Total imports for that year stood at 41,000 tons of natural graphite — of that amount, 71 percent was flake and high-purity graphite, 28 percent was amorphous graphite and 1 percent was lump and chip graphite. The US’ main import sources of graphite for the year were China (33 percent), Mexico (23 percent), Canada (17 percent) and India (9 percent). The other 18 percent was derived from various other sources.
The US graphite consumption was mainly attributed to such end-uses as batteries, brake linings, lubricants, powdered metals, refractory applications and steelmaking.
US graphite mining: Demand rising
Demand for graphite is traditionally closely tied to steelmaking and manufacturing, but is now also coming from the production of lithium-ion batteries. Interestingly, these batteries actually contain 10 to 30 times more graphite than lithium.
Tesla’s gigafactory and mission to source materials from North America have played a significant role in growing call for US-produced graphite. The company is planning to add additional gigafactories in the coming years, and other manufacturers are following suit. According to Benchmark Mineral Intelligence, as of March 2021, there are 200 mega battery cell factories in the pipeline to 2030.
Another potential graphite demand source is the US government via the US Department of Defense’s stockpile requirements, which includes materials like fine grain, high-density graphite. The material has an array of applications in the defense sector: jet engine components, body armor and electronic systems to name few. The nation currently has no stockpiles of graphite, which illustrates the importance of US-produced graphite when it comes to national defense. Reliance on a geopolitical competitor is a key risk for the US defense sector because it could directly impede manufacturing of critical defense systems and equipment.
It’s important to note that graphite demand changes based on the type of graphite. Flake, amorphous, vein and synthetic graphite differ in their uses, and when it comes to the emerging battery market, graphite sources also have to be high in purity.
Graphite mining in the US: Companies exploring
It’s clear that while graphite mining in the US is not happening right now, the country recognizes that it’s something that needs to occur. Even so, there are not very many companies targeting graphite mining in the US. Two projects are currently under development, states the US Geological Survey, one each in Alabama and Alaska.
In Alaska, Graphite One Resources (TSXV:GPH) is focused on its Graphite Creek deposit, which it bills as North America’s largest high-grade large flake graphite deposit. In January 2021, the company announced that the US government had designated the project as a High-Priority Infrastructure Project (HPIP). “We see the fact that our project qualifies under the FPISC’s Renewable Energy and Manufacturing sectors as recognition of graphite as essential to a sustainable U.S. infrastructure supply chain,” said Anthony Huston, CEO of Graphite One.
In 2019, the company increased the tonnage, grade and contained graphite in its mineral resource estimate over that of its 2017 preliminary economic assessment (PEA). The updated mineral resource estimate includes 1.69 million tonnes in the measured category, grading 8.0 percent graphitic carbon; 9.26 million tonnes in the indicated category, grading 7.7 percent graphitic carbon; and 91.89 million tonnes in the inferred category, with 8.0 percent graphitic carbon.
The PEA proposes a graphite product manufacturing plant that can convert Graphite Creek’s annual 60,000 tonnes of graphite concentrate into 41,850 tonnes of electric vehicle battery grade coated spherical graphite and 13,500 tonnes of purified graphite powders. Graphite One is planning to complete a pre-feasibility study in mid-year 2021.
In the southern United States, Westwater Resources (NASDAQ:WWR) holds two flake graphite projects: Coosa and Bama within the heart of the historical graphite producing region of the country. In early 2021, the company announced that as part of a pilot plant study it had produced more than 11 metric tonnes of three battery-grade graphite products: ULTRA-PMG™, ULTRA-CSPG™ and ULTRA-DEXDG™, which were previously produced at a bench scale.
“The core of our pilot program is the measurement of all inputs – such as energy and reagents – and outputs to ensure these high-performance battery-grade graphite products are manufactured in a manner that does not harm our employees, our communities or the environment,” said Chris Jones, CEO of Westwater Resources.
Data from the pilot plant study will inform a definitive feasibility study for the Coosa graphite project processing facility that Westwater projects will be completed in mid-2021. Construction of the plant is slated to begin by the end of 2021. The company expects to commission the commercial plant in Q4 2022.
Certainly, those interested in graphite mining in the US will be keeping a close eye these companies.
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This is an updated version of an article originally published by the Investing News Network in 2015.
Securities Disclosure: I, Amanda Kay, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: This article is not paid-for content.