In light of recent developments, China, the world’s leading graphite producer, accounting for approximately 65% of global production, has announced intentions to curb exports of this vital battery material. This decision closely mirrors an earlier action taken on August 1st, 2023, which saw export restrictions placed on two key chip-making metals, gallium and germanium. The consequential price surge outside of China is likely to repeat itself following this new implementation.
Unpacking China’s Decision To Curb Graphite Exports
China’s decision to cut back on graphite exports is fundamentally designed to safeguard national security and maintain control over supplies of crucial minerals. This comes amidst global challenges to China’s dominance in manufacturing. Critical minerals such as Graphite, Cobalt, and Nickel are front-line components, especially in the rapidly growing electric vehicle (EV) industry. Given India’s National Electric Mobility Mission Plan (NEMMP), the demand for these minerals, particularly graphite, is expected to proliferate.
New Export Requirements and Restrictions
Starting from December 1st, China will require exporters to hold permits for shipping two types of graphite: high-purity, high-hardness, and high-intensity synthetic graphite material, and natural flake graphite and its products. However, China has eased temporary controls on five less sensitive graphite items used primarily within steel, metallurgy, and chemical industries.
The Potential Impact on EV Manufacturers
The ramifications of China’s decision are anticipated to be far-reaching, particularly for countries heavily dependent on Chinese graphite imports, such as South Korea. With the steadily increasing sales of EVs, automakers are in a scramble to secure supplies from outside China, with perceived shortages threatening to drive up costs significantly.
Understanding Graphite
Graphite, a naturally occurring carbon mineral, exists in three crystalline forms namely diamond, amorphous carbon (like charcoal or carbon black), and itself. Its structure features loosely bonded carbon atoms arranged in layers, granting it excellent lubricating properties. In addition to being a good conductor of both heat and electricity, graphite features prominently in the production of batteries and electronics.
Graphite Applications
Although largely recognized for its application in pencils where it is mixed with clay, graphite’s uses extend far beyond that. It is found in crucibles, foundry facings, polishes, arc lamps, batteries, brushes for electric motors, and even in the cores of nuclear reactors.
Global Graphite Reserves
While China is responsible for two-thirds of the world’s graphite production, other countries hold significant reserves as well. According to the United States Geological Survey, Turkey and Brazil own approximately half of the world’s natural graphite resources, accounting for 27.3% and 22.4% respectively. China ranks third with 16%, trailed by Madagascar.
Past Examination Questions on Related Topics
In previous years, examinations such as the UPSC Civil Services Examination have featured questions focusing on similar topics. For instance, a 2012 question highlighted concerns over the limited supply of ‘rare earth metals’, and examined China’s role as their primary producer. A more recent question from 2021 discussed why, despite India’s rich geological history, its mining industry contributes minimally to the country’s GDP.