More may really be better for end users and mining companies when it comes to graphite. Credit Suisse Analyst Michael Slifirski sees something a lot bigger than a zero-sum game in minerals. In this interview with The Mining Report, he explains how a steady source of graphite and vanadium from outside China could create whole new markets for energy storage and aluminum anodes. And he knows just the company to convince manufacturers to make the commitment.
The Mining Report: Will an uptick in electric vehicle sales and use of graphite in aluminum really have a meaningful impact on graphite demand in 2015 and beyond?
Michael Slifirski: I believe so. The graphite market has been constrained by historic uses that have a slower growth rate than the new emerging opportunities, specifically electric vehicles. There’s a lot of enthusiasm around that area. It’s about 10% of the graphite demand at the moment, but it’s growing at an annual rate of 10%. If Tesla Motors Inc.’s (TSLA:NASDAQ) projections are correct, that’s very supportive of the graphite market.
“Syrah Resources Ltd.Syrah Resources Ltd.”
The aluminum market also shows promise for growth. Aluminum anodes represent a new application for graphite with vast market potential. Complete transfer from the current anodes to graphite-based anodes could potentially be a 3 million ton per year (3 Mtpa) opportunity. The natural graphite market currently totals about 1.1 Mtpa. Even if there’s a small portion of uptick in that market, it’s very significant growth. I wouldn’t have excessive expectations around next year, but beyond 2015 I think there is a very bright future for graphite demand.
TMR: Can development of graphene applications have a significant impact on demand for natural graphite?
MS: I think so longer term, but it is not something I would focus on near term. That’s a more exotic use. Clearly there are a lot of interesting applications. Graphene will come, but technologies like that take some time to be fully adopted. In the meantime, I’m more interested in the big bulk established uses where there’s an existing need and a material that can feed that need rather than a terrific solution looking for a problem.
TMR: Will China continue to be the graphite supplier to the world or will a new environmental focus there lead to concerns about supply and demand and development of new mines elsewhere?
