Flake graphite producer Tirupati Graphite believes it stands to benefit from the recent decision by the Chinese government to impose export controls on graphite and related products from December 1. China said the decision would “safeguard national security interests”.
Flake graphite was the largest constituent of lithium-ion (Li-ion) batteries, and there was increasing global awareness of China's domination of the supply of such critical minerals required for the energy transition, Tirupati said in a statement on October 23.
The company is currently one of only a handful of flake graphite producers outside China, and one of only two listed companies outside China that has brought globally significant new flake graphite production capacity into commercial production in the past decade.
Tirupati said that, by 2025, demand for graphite was expected to exceed supply and demand was expected to continue to outpace production growth until well into the next decade as the automotive industry ramped up electric vehicle (EV) production.
Tirupati expects the combination of increasing demand and supply shortfalls, alongside China's export restrictions, to have a positive impact on graphite prices, which have fallen since the start of this year.
Tirupati also expects that consumers of flake graphite outside of China will progress their efforts to secure non-Chinese supply sources for their flake graphite needs to mitigate increasing geopolitical risk surrounding it and other critical minerals.
Tirupati currently provides natural flake graphite from its initial mines in Madagascar, which are in the early stages of production ramp-up. The company is targeting becoming a globally significant player by providing about 8% of global supply by 2030 from its Madagascan project portfolio and its development projects in Mozambique.
The development in China has proved to be beneficial for the company’s strategy, which may further evolve based upon the extent and impact of the announced graphite export restrictions, and the impact on EV battery supply chains and natural flake graphite availability.
Mozambique and Madagascar are the largest producers of graphite outside China and together represent about 15% of current global flake graphite production.
“Our target is for Tirupati to become the leading producer and supplier of natural graphite, including for use in Li-ion batteries and the energy transition sectors outside of China. The global dependence for graphite on China, a key component of the EV revolution, is a cause of growing concern for international customers as supply becomes increasingly constrained,” Tirupati executive chairperson Shishir Poddar said.
He added that the implications of China’s export restrictions were positive for Tirupati, both in terms of the likely impact on prices and on the long-term demand for the company's product given its position as one of the few graphite producers outside of China.
“Western governments have initiated support for critical minerals projects, but it could be expected that policies of this nature as announced by China will further concentrate their focus on projects offering sustainable alternatives to diversify and improve security of supply of the minerals critical to the energy transition such as natural graphite,” Poddar said.