Yahoo Autos Graphite Could Slow Down Domestic EV Supply Chain in the U.S.
Graphite is the latest EV battery material in demand, but the unprecedented growth of the graphite market is going through a few growing pains. The price of graphite has trended upwards but is prone to fluctuations. The big issue is that the graphite market lacks transparency, according to the Financial Times, and that uncertainty is making it hard for miners and producers to get funding.
China is currently the world’s largest producer and refiner of natural graphite, a crucial anode material used in the electrodes of batteries that power EVs and many other modern electronics. China mines 65 percent of the global supply of graphite and refines 85 percent of the mineral regardless of where it came from.
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As the dominant source of graphite, China has a hand in the flow of the mineral, which leaves small volumes to be traded on exchanges where prices are less stable and more opaque. But now that many other countries are making a point of domestic EV production and sourcing — like the U.S. with its recent Inflation Reduction Act — miners like Syrah Resources want to expand existing mines and build new ones; these miners are running into issues because investors and banks are harder to convince when the price of graphite is unclear, per the FT:
Shaun Verner, chief executive of Australia’s Syrah Resources, a Tesla supplier that operates a huge mine in Mozambique, said that the graphite market’s lack of transparency over pricing was making bankers hesitant to fund new projects.
“The single biggest impediment to new investment is the opaque nature of the market because to get the commercial debt in place is really challenging,” he added.
