Graphite: Construction begins on new ‘ultra-large’ flake graphite mine in Inner Mongolia

Located near the city of Bayannur in China’s northern autonomous region of Inner Mongolia, a new flake graphite mine is under construction with capacity of 100ktpy for graphite, lithium-ion battery anode material, and graphene products. While little details of the project are yet known outside of China, a nearby mine in the region is claimed to have a graphite reserve of around 17.8Mt. Construction had begun as of the end of May with a total investment of ¥4.5Bn (US$630M).

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China is the largest producer, exporter and consumer of flake graphite and has dominated the global market for decades. In recent years, however, it has begun to swap some of its domestic production for added-value downstream manufacture, importing increasingly large amounts from abroad, mainly Africa. Total Chinese imports of flake graphite rose from 20kt in 2017 to 63kt in 2018 and 197t in 2019.

However, almost all of this new material was sourced from Syrah Resource’s Balama project in Mozambique which scaled back production significantly from late 2019. Chinese imports from Mozambique fell from 15kt in September 2019 to just 0.7kt in both January and February 2020. China also imports some flake graphite from Madagascar and Tanzania.

This reduction in African output was worrying to a global market hung-up on strongly rising demand from the lithium-ion battery/EV industry. Despite some recent downturns (due to a reduction in Chinese incentives and reduced demand under COVID-19), the EV market is still expected to boom to 2030. With existing Chinese reserves in decline and production costs rising in China (in particular costs associated with environmental controls), the future is unsure for raw material sourcing.

This new mine will go some way to fill the gap left by Syrah Resource’s original design plan; however, even more capacity is likely to be needed to 2030 and the longer term. A recent report by the World Bank Group, for example, predicts that almost a 500% rise in graphite supply would be needed by 2050 in the shift to a ‘low-carbon future’.

Inner Mongolia already contributes an estimated 8-9% to China’s annual flake graphite production, mainly from the area of Xinghe. Flake graphite from this area is typically of large size and more than 70% of Chinese large flake resources are said to be found in the Xinghe region. Large flake graphite is used mainly in expanded graphite applications, with small amounts used in commercial graphene. Large flake is considered unsuitable for use in lithium-ion battery anodes because of its expense, with manufacturers preferring small and medium flake sizes.

A programme of consolidation has been implemented across Inner Mongolia’s graphite industry since 2009. The majority of current production (from the consolidation of at least nine mines) has come under the control of Inner Mongolia Rising New Energy Company, which operates around 60ktpy of capacity.

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This article was written by Suzanne Shaw. Please get in touch below if you wish to discuss further:

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