China, the world’s largest producer, is expected to produce 665kt of natural graphite over the past year. This represents a decline of 5% versus 2019 due to covid-19 restrictions, mainly during the first quarter of 2020 when several mines and plants had to temporarily cease production activities.
Meanwhile, Mozambique, the second-largest producer in 2019, is expected to see graphite output fall from 100kt to 20kt, placing the country sixth overall out of world production.
“The reduction is due to the Balama graphite project operated by Australia’s Syrah Resources being suspended due to restrictions and lower EV demand, with no production at all since April 2020,” Vinneth Bajaj, senior mining analyst at GloblaData, explained. “The project is well positioned to commence operations once the market conditions improve.”
Similarly, production from Brazil is expected to decline by 4.1% due to lockdowns and restrictions, which became prevalent during the second and third quarters of 2020.
Looking ahead, natural graphite production is expected to reach 1,206.6kt by 2024 – a 5.6% CAGR. According to Bajaj, this will be supported by growing demand from the electric vehicle battery segment, where graphite is a key component.
Aside from the potential restart of Balama, projects that are most likely to commence operations during the forecast period include Madagascar’s Molo graphite project (2021), Mozambique’s Montepuez and Tanzania’s Lindi Jumbo (2022).
“These projects, together with the development of Syrah Resources’ Vidalia battery anode material project, which will make it the first vertically integrated producer of natural graphite active anode material outside China, will assist in reducing China’s dominance in the sector and providing alternative sources for battery makers across the globe,” Bajaj added.
