22 November 2023
It’s a fundamental economic equation – When demand exceeds supply, prices go up. One of the biggest growth markets this generation will see is electric vehicle uptake as we witness a paradigm shift in the humble car.
It’s a fundamental economic equation – When demand exceeds supply, prices go up.
One of the biggest growth markets this generation will see is electric vehicle uptake as we witness a paradigm shift in the humble car. With The International Energy Agency forecasting the world’s fleet of EVs on the road will grow from 3.1 million in 2017 to 125 million in 2030, it is only a matter of time until an electric vehicle is the norm.
Each of these vehicles is likely to be powered by a Li-ion battery, which comprises of significantly more graphite than lithium. A Nissan Leaf, for example, contains 40kg of large-flake graphite, the specific type suitable for battery anodes. As more and more EVs hit the roads, battery manufacturers will need a significantly higher amount of large-flake graphite than the world is currently being supplied.
At present, the annual production of natural graphite totals approximately 1.2 million tonnes. In order to meet a demand of up to 950,000 tonnes per annum for battery suitable material, an additional 2.5-3 million tonnes of graphite will need to be produced each year.
The major discrepancy in current supply and demand for battery-grade graphite has already been felt in the price of large-flake graphite. In February 2019, prices for large flake graphite surpassed USD $1,200 per tonne, a rise of 60% since 2016 when prices were at a low of $750.
This 60% rise in price has been in line with increased demand for li-ion batteries which are also crucial components in battery storage solutions – another clean energy product with rapidly growing demand.
Having forecasted this impending supply squeeze, the team behind BlackEarth Minerals sought out a graphite project where it could source large-flake graphite and over the past 12 months, the company’s achievements have been excellent.
In those 12 months, BlackEarth Minerals (ASX: BEM) has confirmed two JORC Resources containing 1.3 million tonnes of graphite, with its recent Scoping Study identifying the Project’s net present value at USD $78.4 million (after tax).
With a project valued at more than 15 times BlackEarth Minerals’ market capitalisation, now is certainly an opportune time for the graphite developer operating in a hungry marketplace.
BlackEarth Minerals trades under the ASX code: ‘BEM’
More information on BlackEarth Minerals can be found at their Investor Centre.
*Reach Markets are paid a retainer to assist BEM with private investor management.