Roskill notes graphite supply concerns hitting the headlines again because it is becoming clear that the electric vehicle revolution will have a faster than expected impact on raw materials. “Despite their name, the lithium-ion batteries that will power this revolution are heavier consumers of graphite than lithium.
“While the high-profile battery factories in the news headlines are all outside China, Roskill has advised repeatedly that China continues to dominate the lithium-ion battery supply chain and that in 2017 China is still the world’s largest producer of flake graphite, spherical graphite, lithium-ion anode material, lithium-ion anodes and lithium-ion batteries.
“Roskill’s work on lithium, nickel, cobalt and lithium-ion batteries informs its work on graphite raw material demand for battery anodes.
“Battery anodes are an application where natural and synthetic graphite are truly in competition. There will be a continued shift in world graphite markets away from amorphous natural graphite towards flake and synthetic graphite as growing applications require these grades.
“New opportunities are arising within the natural graphite industry as companies develop flake resources in Mozambique and other parts of Africa. Around three-quarters of all new capacity (outside China) could be in Africa, where several credible flake graphite projects are being investigated. Other potential new sources are in Australia, Canada, India, Russia and the USA.
“Growth in flake demand has previously been driven by refractories but rapid growth of 16-26%/y is now expected from the battery market, leading to unprecedented demand over the next decade. High consumption of flake graphite is required to account for the very low yield rates in the processing of flake graphite into spherical graphite, for use in lithium-ion batteries. China may seek even more control in this changing industry. Roskill analysts in China are monitoring this situation on the ground.
“A new round of nationally-led plant inspections in China in 2016 and 2017 has reduced flake graphite production by around 30%. Consolidation has taken place in the major producing areas and is expected to continue at a low level. Leading manufacturer of lithium-ion anode material, BTR New Energy, has just signed a new binding off-take agreement for the supply of flake graphite.”
The Balama project, plant construction pictured, is situated in the Cabo Delgado province of northern Mozambique, some 200 km west of the port town of Pemba. Balama is a simple, open-pit mining operation with a low strip ratio. Operations will commence as free-dig mining within the high grade pits of Balama West, using conventional truck and shovel mining. The key operational and financial metrics of the Balama Project are summarised in the following table:
|Operational period||42 years|
|Plant feed rate||2,000,000 t/y|
|Average strip ratio (life of mine)||0.04 ratio|
|Average head grade (life of mine)||16.2%|
|Average recovery (life of mine)||92.5%|
|Average productions (life of mine) – 95% TGC||313,000 t/y|
|Total initial capital expenditure (including 10% contingency)||$144 million|
|Average operating cash costs over life of mine||$286/t product (FOB)|