Graphite is one of the most stable allotropes of carbon having unique physical and chemical properties. Due to graphite’s excellent heat and electricity conducting ability and chemical inertness, it is widely being used as a versatile engineering material in a range of end-use applications. Traditionally, graphite has been in demand for a long time in steelmaking and as refractory materials in metallurgy due to its at high temperature stability and high thermal conductivity. Graphite is also found in a range of industrial and technology applications such as, automotive components, inks and coatings, paints, high strength composites, lubricants, seals, brake linings and grease, modern nuclear reactors, fuel cells, brushes for electrical motors, drilling fluids, steel pipes, tubing, fire retardants and many evolving electronic applications.
The global graphite market is projected to grow from US$14.83 billion in 2021 to US$25.70 billion in 2028, representing a CAGR of 8.2%. By volume, Benchmark Minerals Intelligence (“BMI”) estimates the market to grow at a CAGR of 17% from c.700kt in 2021 to c.4,500kt in 2030. By 2050, Credit Suisse expects annual graphite demand to reach c.5,000kt and c.7,000kt for synthetic and natural graphite, respectively with natural flake demand overtaking synthetic demand by 2026.
Forecast Demand and Supply
International Energy Agency (“IEA”) estimates, under their aggressive sustainable development scenario where the world transitions to meet the Paris Agreement goals, indicate that the graphite market could grow by up to 25x by 2040 relative to 2020.
To date the graphite market has been dominated by steelmaking and refractories which is expected to be overtaken by LIBs as the predominant source of demand for graphite in coming years.
- Benchmark Minerals Intelligence forecast that planned capacity and projects in development will not be able to meet forecast demand as soon as 2025
- Graphite has been declared a critical mineral in the USA, EU, UK, Japan and Australia given its importance to the global transition to clean energy and high supply risk
- Due to the increasing focus on the sustainability and environmental footprint of materials for lithium-ion batteries, any material considering entering the European and the US market needs to demonstrate the highest sustainability standards
- A strong increase in demand for graphite sourced from Africa is expected, particularly East Africa, where several projects are currently under development and will need to come online to meet projected demand
This growth expectation represents a significant opportunity for Magnis’ Nachu Project which is expected to produce c.236ktpa from 2025. Magnis will be well-positioned to take advantage of the predicted global supply deficit for natural flake graphite due to its unique product attributes:
- Consistent intrinsic high-grade and quality of crystal structure with minimal imperfections in its flake graphite
- High purity and quality of flake and ability to achieve CSPG >99.95% purity levels without chemical or thermal purification
- Strong ESG credentials given high yield and absence of toxic processing reagents
- Favourable spread of flake sizes including meaningful super jumbo +500 microns flake which is in scarce supply globally and attracts a significant premium to smaller flake sizes Magnis has the capability to be a leading supplier of superior, sustainable and cost competitive CSPG AAM to the booming global LIB market leveraging its innovative, low-cost, low-energy downstream process and high ESG credentials that are in line with industry standards.