The rapid transition to clean energy is putting the mining and metals industry to the test with demand for critical minerals, like graphite, fast outstripping supply.
The global push for net-zero emissions hinges on having ready access to critical minerals and supply shortages are imminent because of the long lead time and intensive capital required to develop new mining operations, coupled with the geopolitical challenges of China’s supply monopoly. Graphite is at the forefront with market analysts estimating that more than 300 new graphite mines will need to be built by 2030 to meet the demand for electric vehicle and energy storage batteries. Currently, there are around 70 graphite mines in operation, largely concentrated in China and Africa.
Lithium-ion batteries are the gold standard for energy storage, transport and mobile electronics. Graphite is the conductive anode (negative electrode) and the biggest commodity component by volume. It takes up to 10x more graphite than lithium to make a Li-ion battery.
“We forecast battery sector demand for raw material graphite to rise by more than 1,400% between 2020 and 2050. By the end of the forecast period, total graphite demand could be three times the 2021 supply level.”
Market trends at a glance
- The world graphite market is expected to grow to US$21.6 billion by 2027 with graphite demand increasing by 500% between 2018 and 2050. World Bank
- Global demand for batteries will compound 30% year-on-year to 2030 led by Li-ion batteries in electric vehicles: McKinsey
- Electric vehicles sales topped 6.5 million in 2021 – double the previous year and well ahead of forecasts – but EV competitiveness remains hostage to battery raw materials markets: Wood Mackenzie
- Renewable electricity growth is breaking all records. By 2026, renewable power capacity will match the total global power capacity of fossil fuels and nuclear combined: International Energy Agency
- Renewables will provide nearly half the world’s energy by 2050: US Energy Administration
- More than 300 new graphite mines will need to be built before 2035 to meet the demand for electric vehicle and energy storage batteries: Benchmark Minerals Intelligence
- Currently, there is no viable alternative to graphite and shortages could last for 20 years: Benchmark Minerals Intelligence