Mozambique graphite exports to China have dropped sharply, forcing Chinese authorities to look for alternative supplies in Inner Mongolia.
In a new report, market analyst Roskill says Chinese imports from Mozambique fell from 15kt in September 2019 to just 0.7kt in both January and February 2020.
A new ‘ultra-large’ flake graphite mine being built in Inner Mongolia, it adds, is likely to fill in the gap that has been left in the Chinese market by slower production in Mozambique.
Roskill says the mine is located near the city of Bayannur. The project’s capacity is said to be 100ktpy for graphite, lithium-ion battery anode material, and graphene products.
“This new mine will go some way to fill the gap left by Syrah Resource’s original design plan; however, even more capacity is likely to be needed by 2030 and the longer term. A recent report by the World Bank Group, for example, predicts that almost a 500% rise in graphite supply would be needed by 2050 in the shift to a ‘low-carbon future.’”
According to the analyst, even though China has been the largest producer, exporter and consumer of flake graphite for decades, it has begun importing increasingly large amounts, mainly from Africa. Total Chinese imports of flake graphite rose from 20kt in 2017 to 63kt in 2018 and 197t in 2019.
The problem is that most of the new material was sourced from Syrah Resource’s Balama project in Mozambique, which started scaling back production in late 2019.
Without counting the new mine, Inner Mongolia contributes an estimated 8-9% to China’s annual flake graphite production, mainly from the Xinghe area and mostly large flakes.
However, Roskill’s analysis highlights the fact that large-flake graphite is considered unsuitable for use in lithium-ion battery anodes because of its expense, with manufacturers preferring small and medium flake sizes.
Syrah Resources, which operates in Mozambique via its subsidiary Twigg Exploration and Mining, at the beginning of March started exploration of graphite deposits once again in the Balama district of Cabo Delgado province, after a stoppage of around six months.