Natural graphite demand is projected to grow substantially as the need for lithium-ion batteries and active anode material accelerates leading to an expected near-term supply deficit in the non-metallic mineral.
The International Energy Agency (IEA) predicts that clean energy demand will account for 54% of graphite demand by 2030 in its stated policies scenario (STEPS). The IEA forecasts that mineral demand in clean energy technology will be even greater in its more ambitious net zero scenario.
As such, the global graphite market is charging ahead to grow from US$8.32 billion in 2025 to US$13.35 billion ($20.53 billion) by 2032 – at a compound annual growth rate (CAGR) of 6.9% during the forecast period, according to Fortune Business Insights. In 2024, natural graphite production was roughly 1.3 million tonnes, with synthetic graphite production more than double at 3 million tonnes.
Benchmark Mineral Intelligence predicts natural graphite demand will increase 140% by 2030, meaning the market will need about 1.7 million tonnes of the material. That means about 30 new natural graphite mines and 12 new synthetic graphite plants will need to come online globally to fill the void.
In April, James Cross, CEO of Canadian graphite explorer E-Power Resources (CSE:EPR), told Mining.com.au that a perfect storm has been brewing and the wind and rain have just begun, when it comes to graphite’s reign and glory.
“The storm is here. Prices of natural graphite are about 15% above their extreme lows reached in March 2024. All-in sustaining costs are actually still slightly above -100 mesh graphite prices, the flake size used most in batteries. This is unsustainable,” Cross said.
“In addition to EV batteries, or even more importantly, the defence industry stops without graphite. Artillery, tanks, ships, and ammunition all require graphite. Without graphite, the manufacturing base grinds to a halt.”
Graphite is a non-metallic mineral and is one of two natural forms of carbon – the other is diamond. With the highest natural strength and stiffness of any material on Earth, graphite is an excellent conductor of heat and electricity, is stable over a variety of temperatures, and is highly refractory with a high melting point (about 3,650°C).
It also has a high natural lubricity and is one of the lightest of all reinforcing agents.
While chemically inert, graphite has a high resistance to corrosion, which makes it highly sought after and ‘coated spherical graphite’ is used to manufacture the anode in lithium-ion batteries.
There are roughly 200 applications for graphite, however the most significant and enduring application as E-Power’s Cross notes is the future demand from the lithium-ion battery market.
As such, the graphite market is forecasted to substantially grow, reaching an estimated value of US$1.965 billion by 2032, predominantly driven by surging demand from battery-powered vehicles.
Each EV contains about 100kg of coated spherical graphite. It takes 10 to 30 times more graphite than lithium to make a lithium-ion battery and the minimum purity required is 99.95% Cg.
Graphite is used to make thermally conductive polymers, which replace metal in manufacturing automotive components. Data released by the International Energy Agency shows that the EV industry is witnessing rapid growth as momentum towards decarbonisation charges more and more investment in the automotive industry electrification.
While Asia-Pacific dominates the market thanks to China, natural graphite is predominantly produced in Mozambique, Madagascar, and Brazil, with small-scale supply coming from Russia and Vietnam.
Australia, UK, European Union, and US consider graphite to be a critical mineral due to its high intensity of use in lithium-ion batteries and requirement for EVs. There is widespread recognition of the geographic concentration in supply of natural graphite and potential future risks to regional supply security.
Graphite genus
There are different types of graphite in the market.
Flake graphite is formed when deposits of carbon come under pressure and temperature and has a distinctly flaky or platy morphology. Most often hosted in metamorphic rock, flake graphite deposits are distributed fairly uniformly throughout the rock and can vary in both flake size and purity (graphitic carbon content).
Flake graphite is currently the second largest supply source of graphite globally and is the most common variety of natural graphite. It is the only form of natural graphite used in significant quantities in the battery anode supply chain.
Amorphous graphite, on the other hand, is a microcrystalline material that develops from the metamorphosis of anthracite coal seams and this graphite is a seam mineral, not a vein mineral.
It is the least pure in terms of graphitic carbon grade and generally has a higher ash content. Amorphous graphite is extracted using conventional coal-type mining techniques.
Synthetic graphite, which is manufactured through heat treatment of petroleum coke, coal-tar pitch or oil, are not a single material but members of a broad family of essentially pure processed carbon materials.
Products can be tailored to vary widely in strength, density, conductivity, pore structure, and crystalline development. These attributes contribute to its widespread applicability in industrial and battery applications.
Currently, synthetic graphite is the largest supply source of graphite globally by mass and is used in significant quantities in the battery anode supply chain.
Then there’s crystalline vein graphite deposits containing the highest purity of natural graphite, with in-situ graphitic carbon grades ranging between 94-99%. The exact formative process of vein graphite is uncertain, but it is suspected a fluid phase deposit is transformed into graphite through a combination of time, temperature, and pressure.
At present, vein graphite is only produced commercially in Sri Lanka although deposits exist throughout the UK and the US.
In Australia, ASX-listed players in the space include Evion Group (ASX:EVG), Evolution Energy Minerals (ASX:EV1), Kingsland Minerals (ASX:KNG), Lincoln Minerals (ASX:LML), Novonix (ASX:NVX), Sarytogan Graphite (ASX:SGA), Syrah Resources (ASX:SYR), and Talga Group (ASX:TLG), among others.
Write to Adam Orlando at Mining.com.au
Images: Syrah Resources & Unsplash
