ABOUT GRAPHITE

GRAPHITE QUICK FACTS

Graphite, along with diamonds and Coal, are crystalline forms of Carbon:

Graphene - Individual layers

Graphene - Combined layers

Graphite is an essential but often unrecognized material for modern life, with broad industrial applications due to its unique properties:

• Properties of both metals and non-metals (ideal for industrial applications)

• Highest natural strength and stiffness of any material

• Lightest weight of all reinforcement materials

• Very high melting point; low thermal expansion/shrinkage

• High electrical and thermal conductivity

• Low frictional resistance and hydrophobic behaviour (excellent lubricant)

• Non-toxic, chemically inert and high resistance to corrosion

Properties vary depending on the purity and size of the graphite crystals; this directly affects the price of the resource.

GRAPHITE GLOBAL PRODUCTION

Graphite is not a homogenous commodity; it occurs naturally in 3 forms:

FLAKE

AMORPHOUS

VEIN/LUMP

Highest Price, Lowest Supply
High Purity: 85%-98% carbon

Least graphitic of the three
Lower Purity: 60%-90% carbon

Uncommon & highly localized;
<1% of world production;
Marginal applications

40% of global production

60% of global production

Flake graphite: 

Widest range of end uses
Increasing demand for high purity flake graphite
No substitute​

Flake graphite used in batteries - not amorphous

* Source: Comark Securities

RESTRICTED AND UNSTABLE SUPPLY = OPPORTUNITY

• China (+70% of world production) is losing dominance over graphite market due to export tariffs and environmental regulations that reduce supply and increase prices

• China also faced with a reduction of large and medium flake production

Flake graphite production outside of China:

Graphite Global Consumption

• Urbanization of China and India is driving the demand of graphite in traditional applications

• China to build Strategic Reserve: By 2020, reserve must exceed 80% of China’s domestic capacity to hold a steady “bottom line” of supply

• New Tax on Chinese polluting operations coming in effect in January 2018

• Natural Graphite classified as one of 14 critical raw materials by the European Union in 2014

GRAPHITE - HOW IT IS BEING SOLD

• Graphite is not an openly traded mineral

• Prices are negotiated between end users and producers for annual and, sometimes, multi-year contracts

• Prices for graphite vary according to different parameters such as carbon content (purity), size, impurities and shape

• Continuous contact with customers is necessary

• There is a market for 100% of mined graphite material (from large to fine flakes)

• Market Study is underway to identify all end users in all market segments