Industrial Rocks and Minerals: Graphite Commodity Report

1 EXECUTIVE SUMMARY

Graphite is a soft mineral, made entirely from carbon. This forms in three distinct forms: an impure Amorphous type derived typically from coal seams, a flat Flake crystalline form derived from the metamorphism of organic rich shales and limestone, and a much rarer and higher quality Vein/Lump type formed from deposition of carbon rich fluids. Graphite typically has a hexagonal structure in a rhombic formation structure. This structure forms layer giving its key properties, such as the high electrical conductivity. Graphite follows a primary crushing and grinding comminution circuit, with froth floatation acting as a key final step. Graphite can have environmental issues. These are linked to the acid mine drainage from the sulphides present in the host rock and carcinogens in the dust. Grade quality is heavily dependent on deposit type, with the Amorphous type being considerably less valuable that the Vein/Lump. Graphite price peaked in 2012, with $3000USD for high grade +177 μm. The main historic market for graphite is steel production. Graphite is added to the steel to alter the carbon content. However, with the recent rise in electric vehicles, there is set to be a large increase in the demand for graphite, due to their importance in Lithium Ion batteries.

CONTENTS

Click to expand Contents

2 Introduction .................................................................................................................................. 4

3 Geology: ........................................................................................................................................ 4

3.1 Types of graphite: ................................................................................................................. 4

3.2 Regional setting: ................................................................................................................... 5

3.2.1 Vein hosted sedimentary and igneous deposits: ........................................................... 6

3.2.2 Flake Graphite regional setting: .................................................................................... 6

3.2.3 Amorphous Graphite deposits: ..................................................................................... 7

4 Mining Methods............................................................................................................................ 7

4.1 Exploration: ........................................................................................................................... 7

4.2 Methods of extraction: ......................................................................................................... 7

5 Graphite Reserves and Resources ................................................................................................. 9

6 Crystal structure.......................................................................................................................... 11

7 Graphite Processing .................................................................................................................... 11

7.1 Primary Crushing, Primary Milling and Comminution ......................................................... 12

7.2 Froth Flotation .................................................................................................................... 12

7.3 Secondary Milling and Classification ................................................................................... 13

7.4 Filtration Flake and Fine Drying and Classification .............................................................. 13

7.5 Product Bagging .................................................................................................................. 14

8 Commercial Graphite, Grade and Quality ................................................................................... 14

8.1 Natural Graphite ................................................................................................................. 14

8.1.1 Amorphous Graphite ................................................................................................... 14

8.1.2 Flake Graphite ............................................................................................................. 14

8.1.3 Vein/Lump Graphite .................................................................................................... 15

8.2 Synthetic Graphite .............................................................................................................. 15

9 Graphite Market Specifications................................................................................................... 16

9.1 Overview ............................................................................................................................. 16

9.2 Supply Trends ...................................................................................................................... 16

9.3 Future Supply Trends .......................................................................................................... 17

9.4 Demand Trends ................................................................................................................... 18

10 Graphite Pricing ...................................................................................................................... 19

10.1 Historic Pricing .................................................................................................................... 19

10.2 Current Pricing .................................................................................................................... 19

10.3 Future Pricing ...................................................................................................................... 20

11 Environmental issues .............................................................................................................. 21

11.1 Ecological Mine Waste Dust Environmental Water Pollutants ............................................ 21

11.2 Mine Waste ......................................................................................................................... 21

11.3 Dust ..................................................................................................................................... 21

11.4 Environment. ...................................................................................................................... 22

11.5 Ecological ............................................................................................................................ 22

11.6 Water Pollutants ................................................................................................................. 22

11.7 Social Problems ................................................................................................................... 22

12 Current and future trends ....................................................................................................... 23

12.1 Refractories and steel making ............................................................................................. 23

12.2 Nuclear ................................................................................................................................ 24

12.3 Lubricant ............................................................................................................................. 25

13 Conclusion ............................................................................................................................... 25

14 References .............................................................................................................................. 26

2 INTRODUCTION

Graphite is a soft mineral made wholly of carbon. It is an industrial mineral that is mined worldwide on small scale. Global production is approximately one million tonnes per year but has started to decrease in recent years. Graphite is found in metamorphosed sedimentary and some igneous rocks. The size, shape and style of the ore bodies are structurally controlled and often located in structurally complex regions. Due to the certain properties it possesses such as having a hydrophobic nature it can be separated from the waste rock via froth flotation techniques. Secondly, graphite properties have commercial uses such as very high electrical conductivity for the electrical anode component in batteries. Graphite is predominately mined in the countries highlighted below in Figure 1. This is due to the specific geology present within each country.

Figure 1: Highest to lowest graphite producing countries

3 GEOLOGY

3.1 TYPES OF GRAPHITE

Graphite is divided up into three groups:

1. Crystalline Flake Graphite,
2. Amorphous Graphite and
3. vein/lump type.

Each of these groups display different characteristics for graphite.

1) Crystalline Flake Graphite: This is found as isolated, flat, plate like 'flakes' of graphite. They have a hexagonal shape. The flakes account for 49% of natural graphite consumption. Flake graphite usually is of low grade and from small deposits (Syrahresources, 2020). Flakes can range from a few millimetres to several centimetres in diameter.

2) Amorphous Graphite: This is the lowest grade type of graphite. It is typically formed from the metamorphism of existing underground anthracite coal seams. The heat 'destroys' the original organic material in the coal. The graphite is found emplaced in these coal seams where the old coal used to reside (Syrahresources, 2020).

3) Vein/Lump type Graphite: This is the highest quality, rarest and most valuable type of graphite. Vein graphite also has the most desirable characteristics including best thermal, electrical conductivity and ease of moulding. Finally, it is much cheaper and quicker to process vein graphite (Saintjeancarbon, 2020).

3.2 REGIONAL SETTING

All graphite deposits require structural controls for the deposit to form. These structures also act as controls towards the shape, size and grade of the deposit. As an example, Figure 2 below shows the regional scale shear structure in which the Matawinie Graphite Project in Canada is situated. The Allochthonous Gneiss highlighted in blue is being thrust sinstrally over the Parautochthonous Gneiss which is in turn being thrust up onto the Autochthonous Archean Granitoid. Graphite deposits are spatially related to these large-scale structures (Martel, 2018).

The different types of granite mentioned above have different depositional settings.

3.2.1 Vein hosted sedimentary and igneous deposits

The structure of a region dictates what type of graphite deposit will be formed. Vein graphite deposits are structurally controlled. These structural controls act as conduits for carbon-bearing fluids to be transported and deposited (Luque et al., 2013). However, vein deposits can only occur in granulite terranes and igneous rocks. In granulite terranes, high temperatures and pressures result in regional metamorphism of granulite facies. The graphite deposits are closely associated with the axial traces of antiformal and synformal structures in extensional regimes (Luque et al., 2013). The extensional structures, for example fractures, post-date the granulite-facies metamorphic events. It is common for these veins to be steeply dipping en-echon arrays associated with pegmatite bodies and quartz veins. Graphite is the dominant mineral in these arrays however, pyrite, chalcopyrite, quartz and biotite can be found locally associated with these veins (Luque et al., 2013). The Wanni Complex in Sri-Lanka is an example of this type of granulite hosted graphite deposit.

Igneous hosted graphite: These deposits are again structurally controlled. The Borrowdale graphite deposit is composed of a conjugate set of normal faults. These faults are hosted in andesite lavas and sills dating from the Ordovician (Luque et al., 2013). The mineralisation is structurally controlled with subvertical pipes developing at the intersections of the conjugate faults. The andesite host rock is often hydrothermally altered resulting in propylitic mineral assemblages such as quartz, chlorite, epidote and sericite (Luque et al., 2013).

3.2.2 Flake Graphite regional setting

These flake deposits are often disseminated and hosted in metamorphic rocks such as paragneiss, quartzite and marble. They are formed when pre-existing organic matter in sedimentary host rocks undergo regional scale metamorphic reactions under amphibolite conditions (medium pressure - high temperature). The prerequisite for such graphite occurrences pre-metamorphism is a sediment starved continental margin under anoxic – low oxygenated conditions at a suitable depth, at which organic sediments will accumulate. Deposition typically occurs during times of rising sea level which preserves the organic rich sediments without erosion. Regional uplift and erosion are later required to bring the deposit up to surface.

Flake deposits occur as stratabound lenses which can be anywhere from tens of metres thick and hundreds of metres long. These lenses have variable graphite content, this is due to fluctuating carbon content across each lens. The grade can range from 3% carbon content to around 60%. An example of high carbon content can be seen in the Kigluaik Mountains graphite district in Alaska (Coats, 1944).

3.2.3 Amorphous Graphite deposits

Amorphous Graphite deposits are found in the remanence of coal seams. Thermal metamorphism of coal or other highly carbon rich sedimentary rocks caused graphite to occur in these coal seams. The grade of graphite is dependent on the original carbon content of the sedimentary rocks. Metamorphosed massive coal deposits can contain nearly 90 percent graphitic carbon. Whereas, deposits stemming from other carbonaceous sediments or sulphur rich coal seams range from 25-60 percent carbon content (Gilsonite Co, 2020).

The geological settings in which amorphous graphite deposits occur include coal and other organic rich sedimentary rocks for example bitumen. They can be formed in several different environments:

1) Most alluvial systems including alluvial fan and shoreline settings in passive continental margins.

2) Lacustrine and shallow inland seas or intracontinental rift basin settings.

The graphite seams are hosted in a range from conglomerates, metagreywackes, quartzites, to schists. Graphite requires specific temperatures for formations, this is between 300 – 400 degrees.

The amount of graphite present in the seams is dependent on the style/degree of metamorphism.

The amount of graphitisation increases towards the heat source (Gilsonite Co, 2020).

4 MINING METHODS

4.1 EXPLORATION

Mining graphite is carried out due to the specific properties of graphite. Due to the electrical conductivity of graphite methods like electromagnetic surveys and be used in unison with conventional field mapping, sampling, trenching and geophysical techniques. The two main methods of exploratory drilling for graphite are reverse circulation percussion (RC) and diamond core drilling (DD). These two methods have their own advantages, RC drilling helps identify geological and grade continuity. However, DD is preferred due to the graphite core samples it retrieves remains relatively undisturbed which is beneficial for metallurgical work (Snowden Group, 2020).

4.2 METHODS OF EXTRACTION

There are two main methods of graphite mining. Deposits across the world are either mined in an open pit setting and/or underground operations. As per usual, open pit operations are preferred due to less capital and operating costs required and easier waste disposal. Yet as the open pit gets deeper, in order to prevent the stripping ratio becoming uneconomic most mines opt to go into underground construction. However, this does depend on the shape, depth and size the ore body (Robinson et al., 2017).

Graphite deposits defined by crystalline flakes are mined using open pit methods unless the shape of the ore body is not suitable for open pit mining, if the ore body is too steep or if the high-grade proportions contain 15% or more carbon. If so, then underground operations are preferred to maximise extraction. Open pit operations are typically used for lower grade graphite. Crystalline flake deposits are very stable when weathered, even in tropical environments such as Brazil, Kenya, Mozambique (Robinson et al., 2017). The Balama graphite mine in Mozambique is an example of a crystalline flake graphite mine. The mine is composed of highly metamorphosed rock, graphite is found along a ridge in three stratiform graphitic schists (Mining Technology, 2020). The methods of extraction include conventional truck and haul methods with a low stripping ratio. Figure 3 below shows the open pit design for the Matawinie Graphite project in Canada, the slope angles shown are at a moderate gradient in an effort to maximise production and reduce the stripping ratio.

Amorphous type graphite deposits are characterised by high-grade (Greater than 80% graphite) or where the ore intervals are deep. These Amorphous deposits are mined in an underground setting. These deposits tend to be larger than the flake crystalline, such deposits are found in China, Australia, Europe, Sri-Lanka and Mozambique. Mines such as the Archers Eyre Peninsula Graphite Project in Australia use mechanised Longwall stoping techniques, this is very similar to coal extraction methods. A flexible conveyor runs along the length of the face and delivers cut coal into a belt. The main downside to this method is that it has to be carried out in dry conditions.

There is a clear distinction between deposit tonnage and grade of carbon (%), this is shown above in Figure 4. It also shows the significant difference between the crystalline flake deposits and the amorphous.

The third type of graphite, Vein/Lump type is normally mined in an underground setting, and example of this is the Ragedara mine in Sri Lanka (Filion, 2012). The mine itself is dated and required rehabilitation, this includes things like dewatering, removal of mud, replacing corrosion and then making the existing drives and shafts stable. Their proposed mining methods is as follows:

They plan on using a combination of open stoping and overhand cut and fill methods. They intend to backfill some of the existing drives in order to manage the overburden stresses. Prefabricated concrete slabs have been suggested to ensure mine stability. Figure 5 below shows the mining method, with the ore body constrained by two winzes. The width of the of the ore block depends on the size of the vein hosting the graphite. Any ore mined will be hoisted up through pre planned shafts.

Once ore has been hoisted up to the surface conventional haul trucks are used to transport the ore towards the processing plant.

5 GRAPHITE RESERVES AND RESOURCES

In 2018, China was the largest graphite producers producing approximately 630,000 metric tonnes. Worldwide production in 2018 was estimated to be to be 930,000 metric tons with Brazil (95,000 tonnes) and Canada (40,000 tonnes) following China in the highest producers shown below in Figure 7. Even though being relatively low on the global producers of graphite, Turkey has the largest reserves of graphite, as of 2018 it has 90 million tonnes of natural graphite. Global production of graphite went from its peak in 2014/2015 of 1.19 million tonnes and has dropped quite considerably to 897,000 tonnes in 2017 shown in Figure 6a (Garside, 2019).

It has been estimated that the global reserves for graphite is around 380 million tonnes, significantly higher for global resources, however, many deposits fail to come to operation as the marketable grade is not up to standard. The most abundant form of graphite is amorphous or often known as microcrystalline graphite, this type of deposit is dominantly found in countries such as China or Mexico. For crystalline flake graphite the main sources are Brazil, Canada, China, India and Madagascar with China and Madagascar having the highest grades available. Natural graphite has a significant distinction in production cost, time and energy consumption compared to synthetic (Robinson et al., 2017).

6 CRYSTAL STRUCTURE

Graphite is one of four forms that carbon can come in; the other three being carbon nanotubes, diamonds, and fullerenes. Graphite crystallises into hexagonal with rhombohedral symmetry, commonly forming six-sided tabular crystal flakes, shown in Figure 8. Graphite flakes that are well crystallised show a black metallic lustre, whereas, amorphous (microcrystalline) material is generally black and earthy. The crystal structure consists of tightly packed carbon atoms arranged in parallel-stacks of planar honeycomb-lattice sheets which gives it the sliding property to form single atom planar sheets known as graphene. This gives graphite a greasy self-lubricating feel. Graphite has one perfect cleavage, hydrophobic properties, a density of 2.09 to 2.26 grams per cubic centimetre (g/cm³) and is very softy at 0.5 to 1 on the Mohs scale of hardness (Robinson, et al., 2017).

7 GRAPHITE PROCESSING

The separation of graphite from its siliceous gangue is known to be very expensive, energy intensive and time-consuming procedure. The ore is usually around 20% graphite and can sometimes contain small amounts of pyrite. The finished high-quality product of graphite contains 10-100 mg/kg of impurities. The separation technique takes advantage of the ore minerals properties such as specific gravity, magnetism and surface characteristic. Methods such as crushing, gravity concentration jigging, heavyweight media separation, spiralling, air classification, froth floatation and magnetic separation exploit graphite's properties. Recovery for graphite during the processing of the ore is usually around 88-90%.

The common processing procedure of graphite in mining operations consists of primary crushing, primary milling, froth flotation, secondary milling and classification, filtration flake and fine drying and classification and product bagging.

7.1 PRIMARY CRUSHING, PRIMARY MILLING AND COMMINUTION

This is where the ore is broken down and liberates the economic minerals from the gangue but to also to reduce the particle size. This is done by grinding, milling, crushing, cutting or vibrating. Reactivity of the solid components increases with particle size reduction which allows the mechanical separation of any undesirable constituents. The main function for the particle size reduction in this stage are:

1. Liberate economic minerals from the gangue in ore,
2. To expose a larger surface area of the material to facilitate certain chemical reactions like leaching for example,
3. Reduce the size of ore to a specific particle size for later processing.

A jaw crusher or impact crusher (for coarser material) is commonly used during the primary crushing before being screened by a vibrating screen to ensure the ore is the correct size for grinding. A ball or rod mill will then grind the ore to a finer material.

7.2 FROTH FLOTATION

This is the first stage of graphite concentration after crushing and comminution. This process is used to separate hydrophobic and hydrophilic minerals in a water suspension. Graphite is a hydrophobic mineral meaning it does not like water and has a water-resistant surface, so it is amenable to flotation in water with the addition of conditioning reagents. When the air is pumped into the bottom of the tank, the hydrophobic graphite particles attach to the bubbles and float to the surface where they can be selectively separated from the hydrophilic particles.

Flake graphite ore is generally purified in grinding and flotation to prevent any of the flakes being destroyed in secondary milling and grinding which creates large amounts of medium grade graphite(middling). The returning of the middling is known to simplify the flowsheet shown in Figure 9, however, if it can have a difference of properties to the remaining material and due to the amount of it can affect the flotation process. But by adding it back step by step it helps to improve the recovery with graphite with poor floatability properties. Any impurities within the graphite are then removed by chemical or thermal reactions (Allah et al., 2019).

Figure10: generic flotation tank and the components used to separate economic minerals at the different stages (Allah, et al., 2019).

Additional to the natural floatability to the graphite, the introduction of certain reagents such as kerosene and pine oil benefits the separation of mica, feldspar, quartz and carbonate gangue minerals. The scavenger part of the flotation tank shown in Figure 9 is the zone where there is high recovery, the ore then passes into the rough collection zone where there is good recovery and good grade and finally into the cleaner froth zone where the highest grades of graphite are recovered.

7.3 SECONDARY MILLING AND CLASSIFICATION

To ensure that graphite is to the correct size and up to the marketable standard it is then re-crushed and milled then and classified depending on the size of the flake. If the flake is the correct size, then it will move onto the next stage of filtration. Any flakes that don't have the correct size will be milled again until they meet the criteria (Allah et al., 2019). This secondary milling helps to reduce the amount of cleaning needed later in the process (Undall, 1965).

7.4 FILTRATION FLAKE AND FINE DRYING AND CLASSIFICATION

The ore is then filtered in a 'pond', dried and transport to by conveyor to a stockpile where the flake sizes are concentrated into different piles ready to be exported. The flakes are classified as:

• Jumbo flake 300-500 μm
• Large flake 150-300 μm
• Flake 106-105 μm
• Amorphous <106 μm

7.5 PRODUCT BAGGING

Products will be bagged based on the size of the flakes to be exported to market. For example, nuclear reactors use advanced materials which requires only jumbo size of graphite flakes, hence why they are separated out to target the specific market they will be sold to.

8 COMMERCIAL GRAPHITE, GRADE AND QUALITY

8.1 NATURAL GRAPHITE

Graphite for commercial sale is sourced both naturally and manufactured to produced synthetic graphite. The grade and quality of natural graphite is largely influenced by crystal morphology of the graphite ore. Natural graphite ore is dependent on the origin and style of ore body mineralisation. Natural graphite is defined under three commercial classifications, according to deposit type and characteristic properties related to each deposit type, such as crystallinity and crystal form, grain size, average deposit tonnage and ore grade (Schulz et al., 2018). The three commercial classifications are discussed previously in section 4. The characteristic properties of each deposit type are outlined in Table 1.

8.1.1 Amorphous Graphite

The grade and quality of each commercial graphite classification is varied and is reflected in the produced graphite product. Amorphous graphite occurs as low-grade deposits and is regarded as 'low-quality' graphite, due to the relatively small crystal size of particles (<4 μm), requiring multi-stage processing. The final carbon content of amorphous graphite after processing is approximately 70-85%. The level of processing required to increase the purity of amorphous graphite would be economically unviable compared to graphite alternatives. The high levels of impurities and small crystal size render the product unsuitable for technical commercial applications such as electronic components and battery applications. Amorphous graphite is largely retailed in a powdered form for applications as in steel refractories (Saintjeancarbon, 2020).

8.1.2 Flake Graphite

Flake graphite is regarded as a relatively higher quality of graphite than amorphous graphite. After processing, flake graphite carbon content ranges between 85-95%, providing a relatively pure end product, allowing application in battery technology. Flake graphite is sub-divided into small, medium and large plate sizes (40 – 40,000 μm), providing for a wide range of applications which is reflected in the sale price (Saintjeancarbon, 2020).

8.1.3 Vein/Lump Graphite

Lump graphite is the highest quality of natural graphite sold commercially, due to the low levels of impurities within the ore and high graphite-carbon content before processing. The average carbon grade of lump graphite is 95% - 99%, before refining. Due to the high ore grade of lump graphite, little processing is required to produce retail grade graphite; lump graphite does not require binding agents when shaped (Saintjeancarbon, 2020).

8.2 SYNTHETIC GRAPHITE

Natural graphite can be substituted by manufactured synthetic graphite. Synthetic graphite is manufactured globally, but predominantly within China, through the high-temperature heat treatment of precursor carbon. Graphitization occurs at 2,100°C, which is required to produce the graphite structure and remove impurities through exsolution of gas. Synthetic graphite products contain the highest carbon content of all graphite products on the market (99.99%), resulting in a higher electrical resistance, higher porosity and lower density compared to natural graphite. However, the high porosity of synthetic graphite is unacceptable for refractory applications. The controlled grain size of synthetic graphite, alongside the high carbon purity, provides for highly technical applications.

The commercial properties of synthetic graphite are outlined in Table 2.

	Natural Graphite Classification
Characteristic	Amorphous	Flake	Lump (or Chip)
Crystallinity	Microcrystalline	Crystalline	Crystalline
Crystallinity properties	Poorly developed 'earth like' crystals	Well developed 'flaked' crystals	Interlocking coarse crystals
Average grain Size (μm)	< 4	40 - 40,000 (1 - 150 thickness)	1 - 100,000
Average ore grade (contained carbon %)	50 - 90	5 - 30	40 - 90
Average depsoit tonnage (MMT)	0.1 - 500	0.1 - 100	Vairable
Main commerical application	Steel industries, paints, primers and coatings	Refractories, brake linings, lubricants, batteries	Carbon brushes, brake linings, and lubricants
Price range per tonne	$600 to $800	$1,150 to $2,000	$1,700 to $2,070.
Main production location	China, Republic of Korea	China, Brazil, India,	Sri Lanka
Product grade (contained graphite %)	60 to 90	75 to 97	90 to 99.9

Table 1: Properties of the three natural graphite deposit classifications outlined, sourced from Schulz et al., 2018.

Characteristic	Synthetic Graphite
Crystallinity	Microcrystalline - Crystalline
Average grain Size (μm)	2 - 20, 000
Main commerical application	Graphite electrodes, nuclear modateate rods
Price range per tonne	$7000 - $20,000
Main production location	USA, China, Japan, Germany
Product grade (contained graphite %)	99.99

Table 2: Properties of synthetic graphite outlined, sourced from Schulz et al., 2018.

^[1]GRAPHITE MARKET SPECIFICATIONS

9.1 OVERVIEW

Graphite is not marketed on commodity exchange, unlike base and precious metals. Graphite is marketed and sold under supplier – buyer contacting. The economic potential of a deposit is dominantly based on its location and is largely subject to transportation and delivery restriction, in addition to properties of the produced graphite (Schulz et al., 2018).

kT of graphite from Mozambique between January 2019 – April 2019 (Huaqing Fu, 2019). Chinas increased importation is due to the growth in availability of Mozambique-origin material, 0% import tariffs of African origin material as a trade incentive and geographical location providing reduced transportation costs (Huaqing Fu, 2019). Ultimately, China's resources are becoming deeper, OPEX costs are increasing and labour costs are increasing. China is currently undergoing a transition period in aid of improving mining practices and reducing pollution. A number of graphite operations have closed under environmental legislation, reducing Chinese supply of graphite (Graphite Investing News, 2019).

Figure 11: Bar chart highlighting Chinas's decline in fine to coarse grained domestic graphite production between 2010 – 2019, sourced and edited from Syrah Resources, 2019.

9.3 FUTURE SUPPLY TRENDS

A number of graphite supplies have come online since 2017, most notably in Mozambique and Canada see Figure 12B. In June 2019, Syrah Resources (ASX:SYR,OTC) negotiated an agreement with Chinese trading company Gredmann, to focus all Balama operations sales into China (Syrah Resources, 2019). In 2019 Syrah produced 137 kT of flake graphite (86% fine flake and 14% course flake). This highlights a 585% increase from 2018, with significant produced graphite exported to China. Syrah Resource production is set to rise to 150 kT in 2020 (Syrah Resources, 2019). Triton Minerals (ASX:TON) will be a rival Mozambican high grade, fine-coarse grained graphite producer, with first ore scheduled for 2020 (Triton Minerals, 2019). With Triton Minerals also coming online, Mozambique may become the dominant graphite producer for Asia.

9.4 DEMAND TRENDS

Historically, graphite demand has been controlled by the steel market. Amorphous graphite demand has remained constant at approximately 2% per year, correlating with the steel industry and the requirement for refractories. The steel industry mirrors global GDP which is averaging a growth rate of 2.98% AAGR. Post 2010, graphite demand has been steadily increasing, although a minor decline occurred in 2016 due to a decrease in steel manufacture.

Currently, the demand for graphite is outweighed by supply, indicating the anticipated increase in graphite demand. The demand forecast for coarse grained, high purity flaked graphite is set to increase exponentially (Bloomberg Market Analysts, 2019). High grade flake graphite is required to produce lithium-ion batteries; graphite anodes are a key property of future battery technology. Lithium-ion batteries currently account for 25% of the graphite market. The driving factor for this demand is the global shift to electric vehicles (EVs) and battery storage for the renewable energy sector. Globally, pressure is increasing to cut pollution levels. An example of this is the Paris climate agreement (December 2015), a legally binding global agreement to limit carbon emissions. This has driven a major shift in the automotive industries to produce electric vehicles (Syrah Resources, 2019). Bloomberg estimates the compound annual growth of EV sales to increase by 46% between 2020 to 2025 (Bloomberg Market Analysts, 2019). A graphite – lithium ratio to produce modern lithium-ion batteries is 8:1, with future ratios expected to reach 15:1. The knock on effect of the forecasted EV demand and requirements of future batteries indicate coarse-grained, flaked graphite demand to increase to 850 KT per annum by 2030, see Figure 13 (Bloomberg Market Analysts, 2019). Overall, graphite demand is projected to increase by 383% by 2050 (graphite).

10 GRAPHITE PRICING

10.1 HISTORIC PRICING

Since graphite prices peaked in 2012, with high grade +177 μm flake graphite reaching $3000USD, the price of graphite has steadily decreased due to saturated global supply with China's slowing economy, alongside the lack of economic growth in the western economies (Bohlsen, 2019). In the third quarter of 2017, prices for coarse-grained flaked graphite began to rise by 30-40%. Following this price increase Syrah Resources, Mozambique, came online in late 2017 and again flooding the market in battery grade graphite. Although Syrah is operating at 60% capacity, the supply of graphite came too early to match demand and a fall back in global graphite prices followed (Northern Graphite, 2019).

10.2 CURRENT PRICING

Current graphite prices range between USD$550 - USD$1800 per tonne for >95%C flaked graphite and between USD$200 – USD$400 per tonne for microcrystalline refractory graphite, see table 3 (Northern Graphite, 2019). This highlights the increased supply and market saturation as a negative cost driver, with supply of flaked graphite expected to increase post-2020. Chinas existing resource is currently being controlled as leverage to keep market prices low, as Chinese companies shift to downstream importation. The demand for Lithium-ion batteries has not yet impacted the demand and consumption of graphite (Bohlsen, M, 2019).

10.3 FUTURE PRICING

The future of graphite price is uncertain and dependent on the of the rate of battery technology demand increase, which is currently increasing at a slower pace than forecasted. However, as discussed in 10.3, the expected demand increases will outweigh current production levels, and this should lead to higher graphite prices in the future (see Figure 14) (Northern Graphite, 2019).

11 ENVIRONMENTAL ISSUES

11.1 ECOLOGICAL MINE WASTE DUST ENVIRONMENTAL WATER POLLUTANTS

Graphite as a commodity has similar environmental issues that arise with other mining projects. The issues are very similar to any other open pit mining with the main problems arising in the stripping, mining and processing aspects. The main environmental issues surrounding this are summarised in Table 4.

Ecological	Mine Waste	Dust	Environmental	Water Pollutants
Loss of animal communities and species	Acid mine drainage	Lung problems from graphite dust inhalation	Loss of vegetation from stripping	Pollutant discharge from graphite factory
Loss of animal migration paths and habitats	Tailing pond contamination	Crystalline silica (Carcinogen)	Changes in water runoff regimes	Graphite is toxic to aquatic life

Table 4: A summary of the main environmental effects of graphite mining and processing.

11.2 MINE WASTE

Graphite mine waste is normally held within a waste rock pile (WRP) or a tailings pond (TP), depending on the stage of processing. The main environmental concern regarding graphite production is the mine waste. These rocks are, as discussed above in section 4, schists and gneisses. These rocks will contain quartz, and in several cases can contain sulphides, such as pyrite and pyrrhotite. These are the main problems. Acid mine drainage (AMD) is derived from the breakdown of sulphides. This can damage the vegetation and surrounding environment by releasing strong sulphuric acid. As processing will likely include floatation (Robinson et al., 2017), oils and reagent will end in the TP. If the dam breaks, this will leak and can damage the surrounding environment.

11.3 DUST

Although the graphite itself is non-toxic, and is not carcinogenic, there can be inhalation and breathing problems linked to the dust that comes off during mining and processing, particularly during the drying and the screening phases of the processing (Robinson et al 2017). Graphite as a resource is very fine and if dust is not controlled properly, it can spread in a large distance. The graphite dust can cause lung problems such as pneumoconiosis, however, this only occurs in when heavily exposed to the dust for long periods of time. Another concern is that the dust may contain crystalline silica as a polymorph of quartz, which is a carcinogen (Robinson et al 2017). The dust itself can also be a visual eyesore as it may cover vast areas of land in this graphitic dust.

11.4 ENVIRONMENT

As most graphite mining is open pit, one of the largest environmental impacts will derive from the stripping and excavating of large areas of land. This can affect the environment in several ways.

Firstly, this can remove vegetation at both a community at species levels. (Robinson et al., 2017). This is likely to occur during stripping and mine development. There is likely to be increased changes of flooding and landslide events once the vegetation has been removed, due to changes in surface runoff rates (Xu et al., 2013).

11.5 ECOLOGICAL

The exploration and development of a mine can damage the habitat of the fauna and can contribute a loss of habitat. This may also affect migration patterns for species but cutting off routes of travel.

11.6 WATER POLLUTANTS

The main water pollutants come from the processing plants. In China, the pollutants have caused the river water to become undrinkable and prevented the river from freezing over during the winter months (Whoriskey, 2016). These pollutants have also thought to have poisoned and killed the local vegetation and trees.

11.7 SOCIAL PROBLEMS

There are several social problems that come from the graphite mining and processing. These can include the typical problems with mining, such as an alienation of the local population and the forced removal of communities (Mancini and Sala 2018). This can be overcome by obtaining and maintaining a social licence to operate, through community engagement activities.

12 CURRENT AND FUTURE TRENDS

Graphite future trends is heavily linked to the use of batteries as graphite is used to make anodes within Lithium Ion batteries. These batteries are typically used in electric vehicles and therefore future trends of demand for graphite will depend on the demand for electric vehicles (EV).

Figure 15: Future trends of electrical vehicles. The graph shows an increase in percentage of passenger cars that are EV. Adapted from IEA 2019.

Figure 15 above shows the potential future trends of the passenger cars that will be EVs. The Figure suggests that by the year 2030, in ten years' time, 14.5% of the passenger cars will be EVs. Using market outlooks, (Statista 2020), there will be 2.17 million EV in the year 2023. The typical battery used in these EVs, contains around 10 - 70kg of graphite. Using these predictions, it can be shown that by the year 2023, 21.7-151.9 million kg of graphite will be required for EVs alone. This means that the demand will have to be met and there will need to be an increase in current mining efforts. This trend of a switch to EVs is likely to continue, and if there is a switch to 100% EVs, there will need to be an increase of graphite production by 524% (Desjardins 2017).

12.1 REFRACTORIES AND STEEL MAKING

Graphite is also used in refractories and the steel making industry. Graphite is used to increase the carbon content in during steel production. Graphite is also used as during the metal production due to the high heat resistivity and other chemical properties to be used in crucibles and stirring rods, used in refractories (OLMEC, 2019). These aid the production of metals and steel. This production may have declined recently, with China, one of the main consumers for metals worldwide, becoming a more developed country and less requirements for steel. Furthermore, with China in particular, there is a much higher scrap recycling rate, and therefore will not require as much graphite in the recycling process. This can suggest that there will be a drop in the demand for graphite in the steel making industry with regards to the steel industry. However, the same cannot be said for the use of graphite in refractories. There is an increase in the

12.2 NUCLEAR

Graphite is used in nuclear energy. These are typically as neutron moderators by reducing the neutron speed, allowing for the sustaining of nuclear reactions (Goncharov, 1958). As it is difficult to recycle graphite after nuclear use, there will be a sustained demand. Nuclear energy demand in has increased and is predicted to increase further. This is despite to recent nuclear disasters, such Fukushima.

Shown in Figure 16, there is set to be a widescale increase in nuclear energy demand, with an increase of around 200 GW between the years 2018 to 2050. In order to accommodate this, there needs to be an increase in graphite production, as the graphite plays a pivotal role in the nuclear power plants. On average, a nuclear reactor will contain around 30,000 graphite bricks, whose weights vary from 50-70 kg, such as in the reactor in Tokai (IAEA 2001). This suggests that 1500-2100 tonnes of graphite are used in each of these reactors. If future nuclear energy provision is to be met, there will need to be an increase in the worldwide production in graphite.

12.3 LUBRICANT

One of the other main uses for graphite is a solid dry lubricant, mainly within the drilling process (Fink 2015). Graphite itself is considered one of the best lubricants due to the ability of the graphite particles to slide over each other.

Figure 17 shows the global demands for lubricants worldwide. Despite there being no increasing trend the global demand for lubricants there is still around 36-37 Mt required yearly. Assuming if even 10% of this was required to be graphite lubricant, there would a yearly demand of around 3.6 Mt of graphite required for this lubricant.

13 CONCLUSION

In conclusion graphite is a highly valuable resource which is mining in numerous countries of the world. Since the graphite exploration boom of 2011, a number of suppliers are coming online in preparation for the advancing demand of battery grade flaked graphite, used in lithium-ion batteries and renewable energy storage. China currently maintains a large monopoly over global amorphous graphite production, however primary production is declining and replaced by downstream African sourced graphite products. The numerous deposit types for graphite provide the market with varying grades and purities of graphite. The purest forms of graphite (vein hosted) are also the rarest yet processing and refining can bring other types of graphite up to market standard. The type of purity is very dependant on the intended use for the product. For example, graphite in nuclear reactors will require 99.9% pure graphite. Despite the final product typically being used to 'cleaner' energy sources e.g. lithium ion batteries and nuclear reactors the process of mining has numerous environmental issues associated with it such as dust and other ecological issues, yet this is more of an issue with the actual mining process.

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[1] .2 SUPPLY TRENDS

World production and supply of both natural (amorphous, flake and vein) and synthetic graphite is dominated by China (Industrial Minerals Data, 2019). Lump graphite is only mined in Sri Lanka, producing around 18 kT per year (Saintjeancarbon, 2020). In 2001, China produced 710,000 kT of natural graphite (Indux Mundi, 2018). As of 2020, the world graphite market is still dominated by China. However, production statistics highlight a general decline in graphite production in China over the last decade (see Figure 11). In 2014, China produced 780 kT of amorphous and flake graphite, providing 66% of the market supply (see Figure 12A). In 2019, China produced 630 kT of amorphous and flake graphite, indicating 19.23% decrease in annual production, though still providing 69% of global graphite (see Figure 12B). This is due to a number of factors. During 2011 - 2012, a graphite exploration boom occurred due to the increased production of electric vehicles and increased demand of graphite anodes in lithium-ion batteries. Following this boom, oversupply of graphite induced volatility of the graphite market, therefore reducing output from graphite producers outside of China (Industrial Minerals Data). From 2017 onwards, a number of new graphite supplies have come online due to the stabilisation of the graphite market, most noticeably in Canada and Africa. Alongside the increase in alternative supply, China has moved away from up-stream primary production to downstream importation. China's graphite imports increased 438% from 2018 to 2019, importing 63