Forecasted increased demand for EVs over the next decade, due to changing consumer preferences and manufacturers working towards net-zero targets, provides a positive outlook for integrated lithium-ion battery manufacturers and their supply chains.
The growing demand for lithium-ion battery reliant EVs is increasing graphite consumption, and supply is forecasted to be in deficit by 2025 according to a Graphite Market Outlook report published by Macquarie Research.
The report notes EV market penetration is forecast to rise from 11 per cent in 2020 to approximately 60 per cent of vehicle sales in 2030, resulting in graphite demand forecasted to deliver 27 per cent CAGR to 2030, driving prices 25 to 50 per cent higher than current levels.
EV sales in Australia are already booming with the Federal Chamber of Automotive Industries (FCAI) noting five out of the top 10 passenger vehicle models sold in April 2023 offer some form of electrification.
The dominant active material in the anode of the lithium-ion battery, graphite also accounts for the largest proportion of lithium-ion battery’s active material by mass and is valued for its combination of high thermal and electrical conductivity with chemical inertness.
Natural graphite active anode material (AAM), when compared with synthetic graphite, is expected to account for an increasing proportion of battery anodes due to its cost competitiveness, lower greenhouse gas emission intensity, and desirable battery performance properties.
The growing EV and energy stationary storage (ESS) lithium-ion battery requirements will continue to be a deciding factor in the graphite market and graphite’s downstream processing into AAM.
Magnis Energy Technologies Ltd, an Australian lithium-ion battery technology company, is set to contribute to the battery supply chain through its Tanzanian Nachu Graphite Mine project and planned AAM facility.
Magnis Energy Technologies Chair Frank Poullas said China’s current domination of graphite production and downstream processing, and US and EU investment in lithium-ion battery plants will also impact the graphite market and AAM development in coming years.
He further noted that China currently produces approximately 70 per cent of the world’s natural graphite and has a hand it at least one stage of all current graphite downstream processing. Meaning, most of the world’s graphite passes through China in some form or another.
“However, given the investment in lithium-ion battery gigafactories in the EU and US, including Magnis Energy Technologies’ subsidiary iM3NY, and increased emphasis on supply chain security through vertically integrated operations, there will be continued opportunities for graphite mining and AAM development in the market,” said Poullas.
He said strong demand is expected to push graphite prices higher over the next two to three years, with total apparent demand for natural graphite expected to reach 1.5 million tonnes in 2023, up from 1.25 million tonnes in 2022.
Market forecasts have identified Mozambique and Tanzania, driven by large resources, as two countries set to gain the largest share of the graphite market against China.
“The Nachu Mine Project demonstrates significant potential due to its large size, an orebody with very low variation in lithology, and mineralisation and low-cost operational model,” said Poullas.
“Nachu is a significant asset, being one of the largest mineral resources of flake graphite in the world featuring mineral resource of 174MT at 5.4% Total Graphitic Carbon (TGC) with a potential 40-year mine life at ~240,000tpa.”
Recent test results of Magnis’ AAM have shown purity of 99.97% with a First Cycle Efficiency (FCE) of 94.4%, less than 6% ICL and a reversible capacity of >355 mAh/g. Importantly, a higher FCE percentage indicates a lower amount of loss in lithium when the first cycle (also known as the formation cycle in cell manufacturing) is performed on the production floor. With standard natural graphite anode products having an average FCE of 91%, Magnis’ Nachu AAM provides benefits to EV and ESS manufacturers with a higher energy density cell resulting in an increased average range.
“The results have been achieved without any chemical/acid purification or high temperature thermal purification and places the Nachu AAM’s performance in the top quartile of products in the marketplace and the only product without any chemical/acid or thermal purification,” said Poullas.
The AAM facility will strengthen Magnis’ vision of vertically integrating its strategic assets across the lithium-ion battery value chain, as well as meeting the growing supply deficit of critical materials for the broader lithium-ion battery market.
