TORONTO (miningweekly.com) – Prices of flake graphite – the critical mineral used in electric vehicle (EV) batteries and steel refractories – were expected to continue their volatile performance for the foreseeable future, research firm Industrial Minerals Data said on Monday.

Industry prices had settled well above levels seen before the global economic crash despite falling from all-time highs in 2011, and had exhibited erratic behaviour since 2008.

“Flake graphite supply is delicately balanced with little margin for error. China dominates global production with a 73% market share in 2012 according to our new statistics. Limited supply elsewhere, together with unpredictable demand had resulted in the volatile prices seen over the last five years,” Industrial Minerals Data manager Simon Moores explained.

He added the company did not see this situation changing any time soon.

High-purity (94% to 97%), large-flake (+80 mesh) graphite – the sought-after grade for EV battery technology – was now $1 350/t on a cost, insurance and freight basis shipped into Europe. This was 64% higher than the average 2000 to 2009 price of $823/t.

Prices of medium-flake material (94% to 97% carbon, -100 mesh), the more commonly traded product for industrial steel refractories, were also holding up at $1 050/t, 61% higher than the 2000 to 2009 average of $650/t.

“There has been a rebalancing of prices since the extreme peaks seen in 2011, when flake graphite prices nearly doubled in the space of 18 months,” Moores said.

“The declines may have come as a surprise to those newer to the graphite industry, but they have still settled at a significantly higher level than those seen before the global economic crash.”

Graphite is listed as a top ten critical mineral by the British Geological Survey (BGS) and is deemed higher risk than cobalt, lithium, copper and uranium. The mineral was positioned ninth in the BGS Risk List 2012 with a risk rating of 8.1 and was behind rare earths at number one with a 9.5 rating.

There are several new graphite-mining projects in development in the medium term, among which are the 20 000 t/y large-flake, high-purity Bissett Creek graphite project, in Ontario; private project developer Ontario Graphite’s Kearney large-flake, high-carbon graphite mine, also in Ontario; and Energizer Resources’ Molo graphite project, which is being developed as part of the Green Giant graphite project in Madagascar.

China currently produces about 70% of the world’s graphite but in recent months an export tax and a licensing system had been instituted to restrict exports and encourage value-added processing in China. More legislation was also introduced, which would make it increasingly difficult to establish new graphite mines in China.