Will graphite explorers (again) be the next to benefit from the renewable energy transition?

Invited paper for Mines and Money 2017 Conference, London, UK, November 2017

Many of the companies and analysts at Mines and Money in London this year were focused on the battery metals industry. In line with this, I was invited to give an overview of the graphite industry, it role in the battery market and the energy transition, and the prospects, in general, for mining and exploration companies.

The key points made in the presentation were:

  • The energy transition will likely have a substantial impact on some currently minor metal markets, including graphite
  • The multitude of renewable energy, electric vehicle, and battery technologies, however, means it is not clear which technologies (and thus minerals) will be required in the future
  • However, graphite is broadly exposed to the lithium-ion (and some other) battery markets, so a relatively robust bet
  • Unfortunately, many minor ‘critical’ metals, including graphite, are supply-constrained by non-geological and non-technical issues – specifically sustainability and geo-political (‘strategic’) constraints
  • The mining industry, in resolving these constraints, or not, will therefore have a major impact on which minor metals will become available for mass consumption as energy metals by renewables and battery companies
  • So far, the graphite (and wider energy transition) opportunity has not been fully realised by the mining sector
  • Nonetheless, graphite (and some minor metals markets) have the latent potential to become major industrial mineral markets
  • To unlock this opportunity, miners and explorers need to think carefully about their strategy, ensuring supply capabilities are aligned with appropriate market entry and demand scenarios
  • In the end, however, the socio-political context of the energy transition will determine into which sort of future we progress and how graphite is used
  • The socio-political context in the future could be more globalisation, or more localisation, sustainability focused, or geopolitically focused, and with a voluntary or forced transition
  • Two scenarios were described to help envision these differing soicio-political contexts
  • Finally, however, when considering this uncertainty, a ‘hedging’ type strategy is most appropriate for miners and explorers, with the best hedge for graphite being a focus on existing graphite consumer product markets.

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