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No uptake of EVs without sufficient supply of graphite - Greg Bowes, Northern Graphite

27 July 2012

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If 5% of cars worldwide were to become electric, current graphite production would need to double, says Greg Bowes, CEO of Northern Graphite. The Ottawa-based Canadian mine development company could be one of the first to open a graphite mine outside China since the 1990ies. cars21.com talked to Greg Bowes about the strategic importance of sufficient graphite supply in the uptake of electric mobility.
cars21.com: How do you see the price of these materials and especially graphite for the anode material evolving?

Greg Bowes: The material costs in a battery account for about 50% of the overall battery price. The amount of graphite in an EV is between 25-50kgs. If the cost is $10 / kg, you are looking at $250-500 per EV. The cost of the total battery pack for a car might be $15,000. Graphite, which is used for the anode material, is a relatively small part of this cost. The bigger concern for the car industry is supply. Because if supply is tight, prices will go up.

The mathematics are: In a lithium-ion battery there is between 10-15 times more graphite than lithium by weight. However, to make the anode material, you start with flake graphite. It must then be micronised, rounded and purified to 99.95%. That anode material is called spherical graphite. The losses on the rounding are about 2/3. In other words, you must have 3 tonnes of flake graphite from a mine, to make 1 tonne of spherical graphite. So if there are 10-15 times as much graphite in a battery than lithium, you need to start with between 30-45 times as much graphite, in terms of mine production.

If you do the calculations, for example, a million electric vehicles requires between 70,000-100,000 tonnes of graphite concentrate from the mine to make the anode material for the batteries. Current world flake graphite production is 400,000 tonnes. If you think that maybe 5% are going to be electric by 2020, 5% of cars (world production being 60-70 million per year) would need about 400-500,000 tonnes of graphite to make the batteries. You would need graphite production to double. And that does not count growth in other applications, other uses for graphite, hybrid electric vehicles etc. etc.

So, there is a serious supply concern in the graphite industry.

China produces 70-80% of the world’s graphite. They have already announced plans to have a state owned monopoly in the amorphous graphite market, which is the low-value fine grained powder. Flake graphite is the higher value market and there is a concern that we will see similar developments. There is already a 20% export tax on graphite from China, there is a 17% value added tax and you require an export license.

cars21.com: In which other battery technologies than li-ion is graphite employed?

Greg: I am not an expert, but I believe at least a small amount of graphite is used in all conventional battery technologies.

On the supply side, graphite is more critical and scarce than lithium. Because there are less graphite projects under development and because China controls 70-80% of the graphite market. In lithium, there are many more lithium projects under development and we are not dependent on China.

The British Geologocial Survey did a ranking of the supply criticality of several minerals and graphite ranks higher than lithium.

cars21.com: That does not seem to be on the radar of the EV industry yet. There were many discussions about supply security of lithium, but not about graphite.

Greg: If 5-10% of production cars would be electric, they would need a substantial amount of graphite. Nobody knows where this graphite is going to come from. You can make anode material from synthetic graphite. But it is much more expensive, it is not quite as good and there are also supply issues with synthetic graphite.

cars21.com: Are you working with battery manufacturers directly?

Greg: Almost all of the spherical graphite is currently made in China and then sold to lithium-ion battery manufacturers. We have had discussions with many lithium-ion battery manufacturers and they would like us to produce the spherical graphite and sell it to them. We are currently discussing strategic partnerships with these manufacturers because they want security of supply.

cars21.com: On which aspects does your company focus R&D?

Greg: The first two steps of producing spherical graphite – the micronisation and the spheronising – is done by commercial equipment. So that is fairly easy. The third step – purification – is a problem. The Chinese use strong acids to take the concentrate from the mine from 95% carbon to 99.5%. That is not an environmentally sustainable practice. The lithium-ion battery manufacturers do not want to be involved in that.

We are doing R&D to develop an environmentally friendly and economic process for purification. We have successfully purified our graphite and have tested it already successfully in batteries. The first tests were done in a lab and worked fine. The second set of tests will be done on bench-scale. The third step will be a pilot plant test. If that is successful than we will build the full-scale commercial purification plant.

cars21.com: What is the timeline for this?

Greg: We hope to be in production from our mine by the end of next year. That is for the mine. The upgrader, i.e. the plant to produce the spherical graphite including purification not too long after that.

cars21.com: Is spherical graphite also used in other applications than electric vehicles?

Greg: No, but the purification process is also valuable to purify flake graphite for other applications, even if it is not spherical graphite.

cars21.com: Are there any other important players in the graphite market except China and very soon Northern Graphite?

Greg: There are some Western companies that produce anode material for EVs based on synthetic graphite which is the equivalent of spherical graphite. But synthetic graphite is 2-3 times more expensive and the performance not quite as good.

cars21.com: In 2012, dedicated conferences took place, focusing exclusively on graphite. What where your impressions from these conferences?

Greg: Industrial Minerals Magazine hosted a graphite conference in London, that was the first graphite conference ever. It shows how much conditions have changed in the graphite market. Over the last 3-4 years, graphite transformed from a boring industrial mineral into a strategic material. Most attendees were companies using graphite in the manufacturing process, buyers of graphite, a small number of potential graphite production companies and very few investors in graphite.

1.5 years ago there were only 2 public (listed on the stock market) companies with graphite projects under development. Now there were over 50. The interest by the investment community in this market has become very large. At the conference in March in Toronto this year, there were a great number of investors.

Although there are over 50 companies now, there are only very few who have serious development projects. Most of these companies are in early stage exploration. So they have still lots of work, drilling, engineering studies, etc. to do to determine whether they have a mine. There are very few companies who have done that work and are in position to build a mine in the near future, Northern Graphite being one of them.

cars21.com: Would you say that the EV sector was the only driver for this increased interest?

Greg: I would say no. The supply-demand situation in the graphite business is tight. And there is serious concern with supply dependence on China. That relates to the traditional graphite markets. We need a couple of new mines just to meet the demand of the traditional markets and conventional applications.

If you put demand for graphite from lithium-ion batteries for EVs on top of that, you get a serious situation. It is already a serious situation without EVs, that is why investors are interested. But graphite is also a very important component for fuel-cells and many other new technologies. And all of these will compete for graphite supply.

cars21.com: Is there a way of recycling graphite after the end of life of the battery?

Greg: No, generally not, as graphite is used in very intensive applications. And there is very little substitution for graphite.

cars21.com: Greg, many thanks for your insights and all the best for your mining project!


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