China Controls Graphite Supply Chain, a Concern for Energy Transition

Graphite is a crucial element in li-ion batteries used in electric cars and energy-storage devices, among others. The element is mainly produced by China, which has a monopoly over the battery production, refining and export. Currently, China refines more than 90% of the graphite used in electric-vehicle batteries. Most of the global supply of this element is concentrated in China, Brazil and Turkey.

This dominance by the east Asian country is worrying many, particularly those aiming to diversify their supply chains.

Last year, Beijing included graphite on its list of items that need an export license. This has been interpreted as a response to increasing restrictions by Washington on the access China has to advanced semiconductor technology. In response to this inclusion, buyers of battery-grade graphite stocked up on the element prior to the new regulations’ implementation, which caused prices to increase by more than 150%.

Experts note that while the rules imposed by Beijing don’t actually target any country in particular, the institution underscores the country’s dominance over the battery supply chain and, particularly, graphite supply. They explain that the United States will not be able to compete in graphite supply with China directly.

This explains why entrepreneurs in the United States want to use innovation to make graphite obsolete.

Lyten, an advanced materials company, is focused on remodeling battery chemistry to lithium sulfur from lithium ion. This will help eliminate the traditional reliance on minerals such as graphite, manganese, cobalt and nickel while introducing a lithium-metal anode and a sulfur cathode to its battery.

Grant Ray, Lyten VP of global market strategy, explained that the company was focused on diversifying its supply chains. He added that it wasn’t just China that Lyten didn’t want to rely on; the company also wanted to avoid relying on individual states in the U.S. or any other nation that monopolized a part of the supply chain.

Group14, another company, is also using silicon-carbon composite instead of graphite in li-ion batteries.

Though the two companies are employing different strategies, both decrease the dependence on China for graphite by the Western world while also developing new technologies that allow battery consumers to choose to circumvent China. Both companies have major investors financing their works; Microsoft and Porsche support Group14, and Honeywell, FedEx and Stellantis support Lyten.

The companies argue that improved performance is the only difference customers will observe when using their products. Group14’s aim is to launch vehicles with its technology next year while Lyten’s objective is to have its batteries in scooters and e-bikes by 2025, trucks by 2026 and electric vehicles by 2027.

Additionally, companies such as Reflex Advanced Materials Corp. (CSE: RFLX) (OTCQB: RFLXF) are also focused on creating North American supply chains for natural graphite so that those critical applications that require this mineral can access it without relying on Chinese supplies.

NOTE TO INVESTORS: The latest news and updates relating to Reflex Advanced Materials Corp. (CSE: RFLX) (OTCQB: RFLXF) are available in the company’s newsroom at https://ibn.fm/RFLXF

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