Graphite still set to revolutionize the consumer electronics markets and beyond
Graphite and Graphene Week in Review: The ProEdgeWire Graphite and Graphene index showed a loss of 2.85% for the week ending May 17. There were no clear winners or losers, but only Focus Graphite (TSXV: FMS | OTCQX: FCSMF) showed some gains, even if at a moderate 3.33%. The others remained essentially flat. The drop is also consistent with the tail end of a market correction in commodities. The reason why, the lower commodities price can be described as a correction is because viewed against the pattern of the past decade, most commodities are merely trading at two-three year lows. In reality, then, we may still be in a bull market. The graphite space is somewhat new. Fears of a Chinese export embargo just over a year ago helped fuel market interest.
Confusing reports about China’s economic performance have lowered expectations; yet graphite is a key commodity for the future and not a week goes by without a new application for graphite and its nobler derivative graphene being discovered or developed. Therefore, graphite must be seen as a long term proposition. Most industrial graphite needs today are being filled by synthetic graphite, which is actually more expensive (up to ten times as much at current rates) than natural flake graphite. It is made by heating calcined petroleum coke and coal tar pitch in an expensive, polluting and energy intensive process. Synthetic graphite varieties are used in applications where purity is essential and until recently only this ‘man made’ variety was able to achieve 99% purity or higher. However, advancing graphite purification methods, and above all, a literal burst of interest in flake graphite has vastly contributed boosting the availability of highly pure natural graphite. As noted at the Technology Metals Summit, graphite is slated to have an impact on technology no less significant than silicon from the 1950’s to the present as outlined in the presentation from Zenyatta Ventures (TSXV: ZEN) and this article from Gary Economo, CEO of Focus Graphite.
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In essence, graphite has placed junior mining firms at the helm of a major technological revolution trend but thanks to the development of, and demand for, flake graphite driven by accelerating battery technology, fuel cells, alternative energy and especially graphene. As investors who have been following the graphite market know, graphene is slated to become one of the wonder materials of the decade if not the century. Graphene, according to research laboratories across the world will revolutionize telecommunications technologies, will make artificial photosynthesis possible and also improve and ease desalination processes. Graphene, most importantly perhaps, has been shown to increase the amount of energy stored in lithium batteries. Small research companies and university labs are using graphene tom offset the damage to batteries that comes after several charging and discharging cycles and by improving the structure of the anodes.
One of these firms, SiNode Systems, is already working on a lithium-ion battery with ten times the energy capacity of a current Li-ion battery and with much faster charging. The lithium ion batteries currently on the market have graphite anodes, while the cathodes are cobalt oxide, iron phosphate or manganese oxide. SiNode Systems has created a new type of anode made of silicon, which can contain, thanks to a layer of graphene, more lithium ions than graphite. It is understandable for investors to feel frustrated that graphite stock charts still have not translated this potential into higher performance. Flake graphite is still about potential and none of the many applications have reached commercial stage yet. Nevertheless, it is clear that companies, governments, universities and research institutes worldwide are convinced that investment in this material will eventually translate to great benefits. There is a global race to move graphene from the lab to commercial applications. China is establishing whole industrial areas for the development of this material having published over 2,200 graphene patents in 2012 alone – the highest such number. The European Union announced a USD$ 1.3 billion + investment in graphene research last January and the United States is deeply committed to the commercial and industrial development of graphene. Therefore, investors must consider graphene and graphite, in particular, as a long-term investment, especially of those companies located in countries that are actively supporting research and development of this innovative and futuristic material.