F E AT U R E D A R T I C L E
What I Learned About Graphite I
n 2008 Gregory Bowes became a director of the predecessor of Northern Graphite Corporation (NGC:TSXV, NGPHF:OTCBB) and in 2009 became the CEO. At the time, graphite was a sleepy industrial mineral that no one new anything about. Like REEs and Lithium, everyone has had to get up the learning curve including Greg who probably did more than anyone to publicize the graphite story. Now there are over 60 companies but he remains one of the most credible sources in the industry and NGC is widely regarded as the leading company. It is the only graphite company to have completed a bankable feasibility study and is in the advanced stages of permitting. NGC has a large flake, high purity, scalable deposit that is located in Canada, close to infrastructure, and has very competitive operating costs. We asked Greg to share some of what he has learned in the last four years.
n by greg bowes
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1. Well, a major difference is that with base and precious metals everyone gets the same price. In industrial minerals prices vary greatly according quality. With graphite, prices are a function of flake size and purity (carbon content of the concentrates). Graphite deposits can contain little or no “battery grade” material. Or, a very large percentage of the “graphite” may be low purity, micro-flake with no commercial value or at the very least, serious marketing challenges. Impurities can also affect marketability. Grade is always important but with industrial minerals, metallurgy is often more important.
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2. For commodities that China imports, such as iron ore and coal, its policy is to over stimulate new supply from the rest of the world to a point where there is excess capacity and low prices. For commodities where it is the dominant producer, such as REEs and graphite, China is consolidating very inefficient, fragmented industries, improving labor and environmental standards, curtailing illegal mining and moving toward more professional management of its resources. China does not want to sell scarce resources cheaply to the rest of the world as it has done for years, especially while incurring a huge environmental cost to do so. In graphite we have seen export duties, the formation of an amorphous graphite monopoly that will reduce the number of mines from 210 to 20 and serious restrictions on new and existing mines and processing plants. This trend will continue and new graphite mines outside of China are needed. 3. Graphite prices flat lined for over 15 years due to excess production capacity in China and economic cycles had little effect. After that excess capacity was used up, prices more than tripled due to growth in emerging economies. However, it also meant that graphite prices are now subject to economic cycles and slower growth in China has since resulted in them falling by about a third. So graphite is now a bet on a recovery but it is a good bet as no new mines were built during the last cycle. The supply problem will be more acute in the next cycle.
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