Graphite is a critical component of lithium-ion batteries and electric vehicle production will drive increased demand for the material
Natural graphite has multiple applications, particularly in refractories where it is used in steelmaking. However, future demand for graphite is likely to be driven by electric vehicle manufacturers as the material is a key component of lithium-ion batteries. China is the largest graphite producer, accounting for over 60 percent of global graphite production in 2020. China also has substantial graphite reserves, although the largest known reserves are in Turkey, which currently contributes less than 1 percent of global graphite supply.
TDi’s data indicates that natural graphite is perceived to have generally limited exposure to ESG issues. Nevertheless, a small number of reports concerning air and water pollution in graphite purification in China indicate that the potential negative environmental impacts that can be associated with the material. These environmental problems underpin resistance to prospective graphite mines and may drive company-community conflict where risks are poorly managed.
Note: the data and analysis in this profile address natural graphite.
Main Uses and Attributes
Natural graphite is a form of elemental carbon, which is crystalline, opaque and soft. It exhibits metal and non-metal attributes. Metallic attributes include thermal and electrical conductivity, while non-metallic attributes include inertness, high thermal resistance and lubricity. These physical and chemical attributes makes it difficult to substitute graphite with other materials in industrial applications.1https://www.deutsche-rohstoffagentur.de/DERA/DE/Downloads/Studie%20Graphite%20eng%202020.pdf?__blob=publicationFile&v=3
Natural graphite has several industrial applications. The European Commission reports that its dominant application is in refractories for steelmaking. Additional applications include foundries, graphite shapes, lubricants, recarburising, pencils and friction products.2https://ec.europa.eu/growth/sectors/raw-materials/specific-interest/critical_en Graphite accounts for 90 percent of the anode materials used in lithium-ion batteries.3https://www.innovationnewsnetwork.com/graphite-and-the-green-energy-transition/12295/ According to UNCTAD, graphite is increasingly being used in renewable energy technologies such as large-scale fuel cells, solar cells, and nuclear reactors, as well as rechargeable batteries.4https://unctad.org/system/files/official-document/ditccom2019d5_en.pdf
Supply Chain Risk
TDi assesses Graphite for key risks affecting the security of supply, and for its association with artisanal and small-scale mining.
Country Governance Risks
Graphite's association with countries experiencing: