Graphite has become a key critical metal for the renewable energy market and is tipped to continue to be a major focus for many years to come.
According to FACT.MR, the global graphite market surged at a CAGR of 8.5% over the period of 2021 to 2031 and is tipped to expand by a factor of 2.3X over the next 10 years, offering immense opportunities to market participants.
The mineral forecasting site said high investments in the development of newer technologies to support electric vehicles (EV) manufacturing has graphite as a vital cathode material that is used in EV batteries.
Meanwhile, Fastmarkets forecasts natural graphite consumption in the battery sector to rise to a par with consumption in the refractories sector in 2023, and to far exceed refractories consumption of natural graphite in 2024.
By 2025, Fastmarkets expects natural graphite consumption in batteries to exceed consumption from all traditional uses combined.
African potential
One of the regions that is expected to benefit significantly from that increasing demand is Africa, with leading research firms and government bodies keying in on its potential to a critical supply destination.
S&P Global says that East Africa in particular could be the new hub for graphite projects in a bid to diversify supply opportunities away from the world’s largest producer, China. Historically, most graphite has been mined and processed in China. The country produced an estimated 820,000Mt of graphite in 2021, around 79% of total global output, according to the US Geological Survey.
In comparison, the secondlargest producer was Brazil at an estimated 68,000Mt, followed by Mozambique at an estimated 30,000Mt, Russia at 27,000Mt, and Madagascar at 22,000Mt.
But other countries and regions like Scandinavia, North America, Australia, and specifically countries in East Africa, are now launching projects.
It Is Not Surprising That Africa Is Attracting A Good Deal Of New Investment
BGS report
A British Geological Survey (BGS) also noted that the continent of Africa has significant graphite resources, which may provide an opportunity for many African countries to contribute to meeting increased demand whilst also supporting economic growth.
The 2021 BGS report, “Graphite resources, and their potential to support battery supply chains, in Africa”, found that many African countries (most notably Mozambique, Madagascar, Tanzania, and Namibia) already have significant graphite resources and some operatinggraphite mines.
It said that across the continen of Africa, and particularly eastern Africa, significant graphite resources have been identified many of which have delineated reserves and resources.
Definitive, and in some cases, bankable feasibility studies exist for multiple projects in Tanzania, Madagascar, and Mozambique, with many more projects in the exploration pipeline. Graphite exploration programmes are ongoing in Botswana, Ghana, Guinea, Madagascar, Malawi, Mozambique, Namibia, South Africa, Tanzania, and Uganda. Past exploration has taken place in Ethiopia, Kenya, Zambia, and Zimbabwe.
The BGS said it is anticipated that, with the significant exploration that has been ongoing on the continent in recent years, the production of graphite will increase.
Flake graphite production capacity in Africa was approximately 455,000t in 2019 and it was tipped that graphite production capacity will more than treble to 1.55Mt per year if all the planned projects in development come to fruition.
However, the BGS also pointed out that Africa needs to invest in graphite processing (stage three) capacity to capitalize on the opportunities created by potential supply disruptions and on the impetus to break down the bottleneck formed by the concentration of HPSG production.
Stage four, the manufacturing stage, does not take place in Africa, and so the value-adding stages are outside the continent, leading to reduced income.
African leaders are being encouraged to adopt battery production as a continent-wide development priority.
There is a growing lithium-ion battery industry in South Africa which may potentially develop the capacity to process graphite into AAM.
Global interest
With a proven history of graphite discovery and production, it is not surprising that Africa is attracting a good deal of new investment.
US funding
In October, the US government announced it was providing funding for a battery metals project that is fuelled by graphite from Mozambique. Syrah Resources Limited’s (ASX: SYR) wholly owned subsidiary, Syrah Technologies, LLC, has been selected for a US Bipartisan Infrastructure Law Battery Materials Processing and Battery Manufacturing grant (DOE Grant) of up to US$220M from the US Department of Energy (DOE).
The DOE grant will support the financing of the potential expansion of the Vidalia active anode material (AAM) facility in Louisiana, USA, to a 45Ktpa AAM production capacity.
The DOE grants are part of the first set of projects funded by the Biden Administration’s Bipartisan Infrastructure Law to expand domestic manufacturing of batteries for electric vehicles (EVs) and the electrical grid and for materials and components currently imported from other countries.
Syrah is the operator of the globally significant, and already producing, Balama natural graphite resource in Mozambique. The company says Balama’s multi generational mine life, high reserve grade and integrated processing facility will enable the company’s sustainable participation in the battery anode and EV markets.
Marula Mining
Elsewhere, Marula Mining (AQSE: MARU) an Africanfocused mining and development company, recently entered into a binding heads of agreement with Tanzanian mining company, Kusini Gateway Industrial Park Limited (KGIP), securing a 73% commercial interest in the Bagamoyo Graphite Project, which extends over an area of approx. The licences cover 180ha and comprise 22 granted graphite mining licenses located in Tanzania.
“I am delighted to confirm that Marula Mining continues to grow its assets and strengthen its strategy in the battery metals sector,” CEO Jason Brewer said at the end of 2022.
“This agreement with KGIP is a great push towards supporting the global transition to clean energy and clearly outlines Marula’s growing position in the critica metals sector and our ambitions to build our business here in Africa.
“Tanzania now hosts two of our current mineral assets, and we are glad to continue consolidating relations in the region.
“Graphite is an essential ingredient in the manufacture of EV batteries, and as global demand for EVs is expected to drive a massive increase in demand for graphite, we intend to position Marula as best as we can to mine and supply graphite to globalmarkets.”
Castle is king in Ghana
In late November 2022, junior explorer Castle Minerals Limited (ASX: CDT) unveiled an independently estimated Exploration Target of 16.82Mt to 50.46Mt at a grade between 6.74%TGC and 10.40%TGC for the Kambale graphite project in Ghana.
The company said the estimate was limited to a vertical depth of 100m below surface and highlights that Kambale may have the scale, grade, and other attributes to justify its continuing evaluation as a possible producer of a fine flake graphite concentrate that could then be processed for application in the manufacture of electric vehicle battery anodes.
A series of sub-parallel lodes over a 2.7km north-south strike and within an up to 500m-wide corridor has been outlined at Kambale with mineralization remaining open to the north, south and to depth.
