China has around 400 graphite mines. That’s a fairly startling statistic, don’t you think?
Here's something just as interesting: China is investing large sums to build its own graphite processing and downstream uses.
We hear a great deal about all the latest graphite and graphene technology and applications, but perhaps we should pause and step back, then take a look upstream on where all this graphite comes from. For that we have a graphite sector review, and its authors at Libertas Capital Partners in London, to thank.
The report reminds us that, as with rare earths (and fluorspar, tungsten and magnesium), China produces most of the world’s natural graphite – between 800,000 and 1 million tonnes of the global supply of between 1.2m and 1.5m tonnes. Most of China’s graphite comes from Heilongjiang province. Those mines located in the north of the country close during the winter months of November to March, so there are seasonal supply variations.
Libertas sees China having a stranglehold on the graphite market because it actually has the capacity to produce 1.6 million tonnes a year. Of the graphite still in the ground, China has 73 per cent of known resources, followed by India (12 per cent), Brazil (7 per cent), North Korea (3 per cent) and Canada (2 per cent). Clearly, and again as with rare earths, the new wave of exploration by Western companies will see this resource balance altered substantially in the years ahead.
Libertas provides a list of the top graphite producers along with their annual production:
Jixi Liumao Graphite Resource (China) 90,000 tonnes
Heilongjiang Austrian Yu Graphite (China) 80,000 tonnes
Qingdao Haide Graphite (China) 75,000 tonnes
Chenzhou Lutang Crystalline Graphite (China) 70,000 tonnes
Nacional de Graphite (Brazil) 70,000 tonnes
Karaback Metal & Mining (Turkey) 50,000 tonnes
Qingdao Hensen Graphite (China) 38,000 tonnes
Lubei Yxaing Graphite (China) 30,000 tonnes
Extractive Menaquinone (Brazil) 30,000 tonnes
Graphite Kaiser berg (Austria) 30,000 tonnes
However, tonnages do not tell the whole story, as this report explains.
As much as 70 per cent of China’s output is very fine flake, or amorphous graphite, with the rest being flake. Most of the production is around the +200 mesh range.
Again, there are historical parallels so far as China is concerned: as with rare earths, tin, tungsten, antimony and other metals, during the late 1980s large stockpiles of natural graphite were dumped into the open market resulting in the price crashing. During 1989-1991 mines closed around the world as a result (as did miners of the other metals that China dumped).
And the parallels with rare earths don’t stop there.
Most of China’s graphite goes abroad, much to Japanese manufacturers such as Showa Denko. China now has a 20 per cent export duty on graphite, Libertas explains. In addition, the government is pouring $US1.6 billion into the Jixi City region to build manufacturing plants that will make synthetic graphite and engineered graphite products.