Client NewsTirupati Graphite Plc – Implications of China’s Graphite Export Restrictions
Tirupati Graphite plc (TGR.L, TGRHF.OTCQX), the specialist Flake Graphite company and supplier of the critical mineral for the global energy transition, notes the recent decision by the Chinese government to impose export controls on Graphite and related products from 1 December 2023 stating that the decision would ‘safeguard national security interests’.
Flake Graphite is the largest constituent of Lithium ion batteries used in various applications including electric vehicles and grid energy storage. There is increasing global awareness of China’s domination of the supply of various critical minerals required for the energy transition, including Natural Flake Graphite. The Company is one of very few current producers outside China, and one of only two quoted companies outside China that has brought globally significant new Flake Graphite production capacity into commercial production in the past decade, and at industry leading capital intensity levels.
By 2025, demand for Graphite is expected to exceed supply and demand is expected to continue to outpace production growth until well into the next decade as the automotive industry ramps up EV production.
Tirupati expects the combination of increasing demand and supply shortfalls, alongside China’s export restrictions, to have a positive impact on Graphite prices which have fallen since the start of 2023. Tirupati also expects that ex-China consumers of Flake Graphite in energy transition sectors and others shall progress their efforts to secure ex-China supply sources for their Flake Graphite needs to mitigate increasing geopolitical risk surrounding it and other critical minerals.
Tirupati currently provides Natural Flake Graphite from its initial mines in Madagascar which are in the early stages of production ramp-up and is targeting becoming a globally significant player by providing c. 8% of global supply by 2030 from its Madagascan project portfolio and its development projects in Mozambique. This development in China reinforces the Company’s strategy, which may further evolve based upon the extent and impact of the announced Graphite export restrictions, and the impact on EV battery supply chains and Natural Flake Graphite availability. It is also important to note that Mozambique and Madagascar are the largest producers of Graphite outside China and together represent c.15% of current global Flake Graphite production.
Shishir Poddar, Executive Chairman, said:
“Our target is for Tirupati to become the leading producer and supplier of Natural Graphite, including for use in Li-ion batteries and the energy transition sectors outside of China. The global dependence for Graphite on China, a key component of the EV revolution, is a cause of growing concern for international customers as supply becomes increasingly constrained.
“The implications of China’s export restrictions are positive for Tirupati both in terms of the likely impact on prices, and on the long-term demand for our product given our position as one of the few Graphite producers outside of China.
Western governments have initiated support for critical minerals projects, but it could be expected that policies of this nature as announced by China will further concentrate their focus on projects offering Sustainable alternatives to diversify and improve security of supply of the minerals critical to the energy transition such as Natural Graphite.”
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