China Sets Access Standards for Its Graphite Industry
China’s Ministry of Industry and Information Technology (MIIT) released a document entitled, “Graphite Industry Access Conditions” on December 07, 2012 to regulate its graphite industry by imposing restrictions on production scale, technique and equipment, product quality, energy consumption, water consumption, the level of comprehensive utilization and environmental protection – among other details. The document clearly points out that graphite is a significant and strategic non-metallic mineral resource, deserving of attention and protection as a strategic resource. This is the first time China sets access standards for its graphite industry. The new access threshold aims to accelerate the pace of adjusting and upgrading the industrial structure, promoting mergers and reorganizing to reduce the number of enterprises, enhancing industry resource concentration, improving resource use efficiency and enhancing market competition for the domestic industry in general.
According to the Document, the reorganizations concerns all aspects of graphite and graphite mining, including crystalline flake graphite and amorphous graphite, high purity graphite, expansible graphite and flexible graphite.
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The new entry threshold for graphite includes for open pit mines: a production capacity of no less than to 500,000 metric tons per year as well as a recovery rate of more than 90 percent. In the case of an underground mine, it must have a production capacity of no less than to 100,000 metric tons per year while achieving a recovery rate of more than 70 percent. Newly built, reconstructed crystalline flake graphite mining projects should have a scale of production of at least 20,000 metric tons per year and the single line capacity should be at least 5,000 metric tons per year with a recovery rate at more than 85 percent. Amorphous graphite mining projects should be marked by a scale of production of at least 150,000 metric tons per year and a single line capacity that should be at least 30,000 metric tons per year as well reaching a recovery rate of more than 85 percent. High purity graphite projects should have a production scale of at least 5,000 metric tons per year and more than 85 percent yield. Expansible graphite projects should begin at a production of at least 5,000 metric tons per year as well as reaching a yield of more than 95 percent. Flexible graphite projects should have a scale of production of at least 1,000 metric tons per year, reaching a yield of more than 90 percent. In addition, the new conditions also require enterprises to achieve newly established environmental protection technologies, while reducing consumption of energy, water, and the level of comprehensive utilization.
China is the world’s largest graphite producer and exporter, having produced 650,000 metric tons of flake graphite production, accounting for about 75 percent of the world’s graphite total output in 2010. Forecasts have shown a rising domestic demand for flake graphite production, which should reach 950,000 metric tons with a growth rate of about 7.9 percent by the end of 2015, according to China’s Ministry of Industry and Information Technology (MIIT). The China Customs Statistics Information Center reported that the export volume of natural flake graphite ore in China was 7974.9 metric tonnes in October 2012. China’s total exported metric tonnes of natural flake graphite ore, was down 29.9 % in 2012 to 88,449.4 metric tonnes in the first ten months of 2012 (from January to October). China saw its export value of natural flake graphite production decrease by 33.3% in 2012 to USD $964, 270, 00 in 2012. China’s total exported 149000 metric tonnes of natural flake graphite ore in 2011 and overall exported 179,000 metric tonnes of natural flake graphite ore in 2010.
China has the largest graphite industry in the world; it is also the largest graphite consumer and exporter. However, the development of the graphite industry has been facing many problems such as the exploitation of resources, blind expansion of production capacity, low production concentration; the core technology of heteronomy, tight industrial chain, which accounts for an unsustainable structure from the point of view of comprehensive utilization of resources, ecological environment or debt.
Along with an acceleration of the transformation, upgrading and structural adjustment of the graphite sector, China has started to tighten its policy on the graphite industry. Therefore, China’s decision to enforce access standards for its graphite industry will ultimately be good for world’s graphite prices in general.
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