How to Invest in Graphite in Australia

Graphite in Australia: Potential producers

The government has identified five projects between Western Australia and South Australia that have the potential to bring Australia to the table when it comes to production.

However, as of the most recent government report, none of them are producing. One asset is being explored, another is in the prefeasibility stage and the remaining three are in the feasibility stage.

In February 2022, the Australian government approved a total of AU$239 million in loans as part of its AU$2 billion Critical Minerals Facility to two graphite companies. These companies were Renascor Resources (ASX:RNU) and EcoGraf (ASX:EGR), who are looking to produce purified graphite in South Australia and Western Australia.

Renascor’s Siviour project on South Australia's Eyre Peninsula is one of the more developed graphite projects, with an estimated annual production capability of 123,000 tonnes. The project has been granted major project status by the Australian government, and the company says it has the world’s second largest proven graphite reserve and largest graphite reserve outside of Africa.

As for Ecograf, it owns the Epanko graphite project in Tanzania and a processing facility in Western Australia. The company plans to manufacture battery graphite products in an environmentally friendly manner.

Another notable project is Mineral Commodities' (ASX:MRC) Munglinup project in Western Australia, where a definitive feasibility study was completed in early 2020, with a final investment decision targeted for the second quarter in 2024.

The Munglinup project is Mineral Commodities' second major graphite project, behind its flagship Skaland project in Norway. Munglinup is in the far south of Western Australia, near the port city of Esperance.

Munglinup and Siviour, if they proceed in coming years, would produce a combined 126,500 tonnes of graphite in the early stages, putting Australia well and truly on the leaderboard globally when it comes to graphite production.

The remaining projects — though not as developed or as far along with investment planning — would add another 178,000 tonnes of graphite production if they are constructed as envisaged.

The Australian government has boasted that "the only direction for Australia's graphite production is up," though that is also a reflection of the fact that current graphite production is exactly zero.

More broadly, Australia is positioning itself to take advantage of wider industry gains across the electric vehicle market, and to present itself as a reliable trading partner. Graphite, like rare earths, is classed as a critical mineral by both Australia and the US, and its use extends beyond technology and into national security as well, given its applications as a heat-resistant material.