Rising demand from the electric vehicle battery segment, where graphite is a key component, and the restart of projects in Africa, could push global natural graphite production up by 7.6% in 2021 to 1.0255 million tonnes, according to GlobalData.
GlobalData said: “While output has declined by 15.4% to 952,600 tonnes in 2020, it is expected that natural graphite production will increase by 7.6% in 2021 to 1.0255 million tonnes and grow to 1.2066 million tonnes by 2024 at a 5.6% CAGR.”
Likely surge in output
The expected rise in global output this year would be mainly in wake of the restart of some large projects in Africa, including Balama and Montepuez in Mozambique, Madagascar’s Molo project and Tanzania’s Lindi Jumbo.
BlackEarth Minerals NL (ASX:BEM) is reviewing several downstream value-added graphite processing opportunities for its Maniry Graphite Project in southern Madagascar, with its bankable feasibility study (BFS) underway.
Graphite from Maniry meets the specifications required for applications in the expandable, refractory and lithium-ion battery industries.
On completion of its BFS, the next stage is project execution, including engineering, procurement and construction (EPC) and engineering, procurement, construction and management (EPCM) contracts.
In Australia, Archer Materials Ltd (ASX:AXE) (OTCMKTS:ARRXF) (FRA:38A) can also progress the Campoona Graphite Project following approval from the South Australian Government for its Program for Environment Protection and Rehabilitation (PEPR).
The company has made steady progress on the project since the granting of a mineral lease in December 2017, which includes technical studies determining that the graphite at Campoona is structurally near perfect, and the project can also produce graphene.
The product can also be integrated into commercially scalable lithium-ion batteries and can be processed into high-value spherical graphite products.
Next steps towards production involve finding a partner or buyer of the project.
Recent decline in output
After rising in 2018 and 2019, global natural graphite production was adversely affected by COVID-19 related restrictions in 2020, as mines were placed either under care and maintenance or temporary suspension due to government implemented global lockdowns across many countries.
Output in China, the world’s largest producer, fell by around 5% last year compared to 2019 as authorities imposed severe restrictions to curb the spread of COVID-19, mainly during the first quarter of 2020 when several mines and plants were forced to temporarily cease production.
GlobalData senior mining analyst Vinneth Bajaj said: “While it was the second-largest producer in 2019, Mozambique’s graphite output is expected to fall from 100,000 to 20,000 tonnes, placing the country sixth overall out of world production.
“The reduction is due to the Balama Graphite project, operated by Australia’s Syrah Resources, being suspended due to restrictions and lower EV demand, with no production at all since April 2020.
“The project is well-positioned to commence operations once the market conditions improve.”
GlobalData said that similarly, production from Brazil was expected to decline by 4.1% due to lockdowns and restrictions, which became prevalent during the second and third quarters of 2020.
Production to grow
Bajaj said: “Natural graphite production is expected to reach 1.2066 million tonnes by 2024 – a 5.6% CAGR.”
“This will be supported by growing demand from the electric vehicle battery segment, where graphite is a key component.
“These projects, together with the development of Syrah Resources’ Vidalia Battery Anode Material Project, which will make it the first vertically-integrated producer of natural graphite active anode material outside China, will assist in reducing China’s dominance in the sector and providing alternative sources for battery makers across the globe,” he added.