Due to high globalization in graphite production industry, AMECA Mining faces competition from both Canadian and international companies. Chinese companies have traditionally dominated the market because of state support, large graphite reserves, economies of scale, low labour costs, and often abysmal environmental standards. However, China’s reserves have been in decline, tighter environmental regulations are being imposed, and European and North American buyers are actively seeking to secure their supply chain with alternative sources. New graphite projects in Africa (most notably Syrah Resources in Mozambique) are being developed, but the graphite is generally of inferior quality (a large percentage of the flakes are of medium size or smaller). The only region with graphite of comparable purity is Quebec, but the graphite is quite highly intercalated in hard host rock – making it difficult and very costly to extract and process.
Synthetic graphite is produced from petroleum coke or coal tar. The material has been adopted for the use in battery anodes, most notably by Tesla, because of issues in finding natural graphite of the consistent quality required. However, synthetic graphite is expensive to produce and requires a tremendous amount of energy (the process requires a temperature of 2000C for 10 days). The process results in NOx, SOx, and PM10 emissions, due to sulphur, nitrogen, and ash impurities in the coal tar pitch and pet coke, which burn during the carbonation process. As supply chains come under more scrutiny, an increasing important factor will be whether source material aligns with an automaker’s green credentials.
Indirect Competitors (Changes to Battery Technology)
A tremendous amount of resources have been deployed to improve the efficiency of the battery cell. Several companies such as EoCell, Enevate and Sila Nanotechnoligies are exploring the possibility of substituting graphite used for EV battery anodes with silicon. Silicon has ten times higher capacity than graphite. Successfully replacing graphite with silicon could lead to lighter and safer batteries. Unfortunately, although silicon can take on more lithium than graphite, it tends to expand about 300 percent in volume, causing the anode to become electrically insulating and break apart. The current scientific consensus is that in the near-term silicon is unlikely to compose more than 5-15% of the anode with graphite maintaining the remaining 85-95%.
Several companies such as QuantumScape and Ionic Materials have been attempting to develop a solid state battery – using solid electrodes and a solid electrolyte instead of the liquid or polymer gel electrolytes found in lithium-ion and thus eliminating the graphite anode. Solid state batteries are potentially safer, with higher energy densities, but at a much higher cost. Although solid state batteries are currently used in pacemakers some wearable devices, most experts agree that this technology is still 5-15 years from being commercially viable for the EV battery market. Today’s gigafactories are designed for current lithium-ion batteries. Even if lithium metal technology advances more quickly than expected, switching costs will deter early adoption.