Elcora’s Dr. Ian Flint on Tesla’s challenge to find graphite
September 12, 2014 — In a special InvestorIntel interview, Tracy Weslosky, Editor-in-Chief and Publisher for InvestorIntel interviews Dr. Ian Flint, VP of processing and Refining at Elcora Resources (TSXV: ERA), about some of the misconceptions that investors have about graphite and Tesla’s challenge to find enough graphite.
Tracy Weslosky: Today I have the privilege of speaking to one of the most world-renowned experts on graphite, Dr. Ian Flint. How are you today?
DR. IAN FLINT: I’m very good. Thank you very much.
TW: Dr. Flint, there are is so many misconceptions out there on graphite right now I don’t even know where to begin. How about we start with the famous flake size? Does flake size matter?
DR. IAN FLINT: Yes. There’s the short answer. The long answer is that there is a trough in the middle and on both ends worth more money, which means as you go from a middle point of about 100 microns and go larger you value increases. As you go smaller, your value increases so yes it matters.
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TW: Alright. Then, of course, we have different types of graphite so for instance, Sri Lankan graphite or the unusually fine that Zenyatta has. Can you speak to this type of graphite; these different types?
DR. IAN FLINT: There’s no difference between them. They’re both vein type. They’re both geothermal. The difference is in basically the speed at which they were formed, which means Zenyatta has a finer crystal size then Sri Lankan does. The Zenyatta was forming basically in a big pit whereas Sri Lanka is a lot of very fine veins.
TW: We have a couple of companies that have spoken to us about how their graphite is better because it comes out of softer soil and that apparently the harder the rock that you pull the graphite out you actually destroy some of the graphite in the extraction process. Is this true?
DR. IAN FLINT: Absolutely.
TW: It is true?
DR. IAN FLINT: Yes.
TW: Okay. It’s beneficial then if it’s, I don’t know, closer to the top of the surface and — Talk to me a little bit about this.
DR. IAN FLINT: Now what you’re concerned about is preserving the crystal morphology or what the crystal looks like. The more crushing and grinding and processing you have to do the more you are going to affect that. If you have a graphite mine that you’re basically just taking out the soil and the graphite is in the soil, you don’t need to do any crushing and grinding and you preserve the crystal that much better. The opposite end of the scale is when you’re mining just out of sinuous where you have silica interground into the graphite. You have the very easy to the very hard.
TW: For instance, we have a couple of companies, of course, like Syrah Resources, which have their primary — where they have their graphite in Africa. Can you talk to us about African graphite for instance? You’ve traveled the world.
DR. IAN FLINT: The Mozambique Belt is a very old series of rocks that when all the continents were together at one time ran from what is nowAntarctic up to western Australia through Mozambique, Malawi, Tanzania, Kenya, but also Madagascar, Sri Lanka and southern India. All of those rocks contain graphite. Some of them are quite well weathered and you just pull the graphite out. You’ve got Syrah Resources down there. You’ve got Sovereign. I’ve got a graphite deposit down there with a company called African Graphite, but you’ve also got the Molo Deposit, which is Energizer, and you’ve got all the Sri Lankan ones and there’s a number of ones in India. There’s a couple of more in Tanzania too, but I don’t remember the name of them.
TW: So, what is the number one fallacy you hear about graphite that makes you cringe at graphite industry parties?
DR. IAN FLINT: Mostly when people say that they’re going to get a lot of money for it and they don’t realize that it is so client specific, okay? In other words, in the battery market you’ve got some companies that want 20 micron graphite or 15 micron graphite. You’ve got other companies that want ball graphite. You’ve got other ones that want 20 micron and then you’ve got others that want 300 micron all for batteries. You have to be very, very specific as to what your client needs. Until you do that, quoting you prices is rather meaningless.
TW: So, end-user relationships are very, very important.
DR. IAN FLINT: Absolutely.
TW: Can you tell me — for instance, everyone is talking about Tesla. Is this the number one end-user for graphite or would you like to explain to our audience who the number one user is for graphite?
DR. IAN FLINT: The graphite market is about the same size of the nickel market, but it’s divided into two where you’ve got the amorphous graphite and you’ve got the flake graphite. 70% of the graphite comes out of China. However, most of that is the amorphous graphite or low-quality graphite. That goes into the steel industry; most of it. That is the major use and it will continue to be the major use. What Tesla represents is the battery market, which is the high-end market where you get the most money. That’s why people are targeting it, which makes sense. This makes perfect sense. The quality control in that graphite has to be quite rigid. There’s very little graphite that is produced in the world that actually qualifies for battery grade graphite; maybe 20,000 tons, maybe 30,000 tons out of the one million tons that’s produced a year. Right now that’s basically cornered in China and most of the batteries are made in China. If Tesla can make their Mega factory or Gigafactory or whatever they want to call it in the United States it would be wonderful. I would support it all the way. They’re going to have trouble finding the graphite for it.
To hear the rest of the interview, click here
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An accomplished entrepreneur and corporate finance professional, Tracy Weslosky is the CEO for InvestorIntel Corp. and the VP of Business Development for Bellotti Capital Partners ... <Read more about Tracy Weslosky>