Graphite demand to rise as WA joins global push to ban combustible building materials
Link copied to
Demand for graphite is about to grow in Western Australia with news the State has joined a growing number of regions restricting the use of combustible material in buildings.
It’s good news for WA’s high-rise residents in the wake of tragedies such as the Grenfell Tower fire which has already led to the banning of combustible cladding materials in England
It’s also important news for ASX-listed graphite players because the commodity’s unique ability to withstand extreme heat and prevent fire from spreading is making it attractive to makers of building materials.
Any combustible cladding proposed to be used on high-risk buildings needs to demonstrate it has passed the large-scale fire test required under Australian Standard AS 5113 or receive approval from the Building Commissioner.
The Mark McGowan-led government says the update to the Building Code of Australia (BCA) and the introduction of the new building regulations will substantially prevent the use of dangerous polyethylene cladding or an expanded polystyrene cladding in a building facade.
“The McGowan Government is taking the issue of cladding very seriously,” acting commerce and industrial relations minister Francis Logan said.
“Amendments to the building regulations have been introduced to close any opportunity for developers to get around the non-combustibility requirement for cladding in the BCA.”
When treated with acid and heat, graphite flakes split apart and increase in volume by up to 300 times. This “expandable graphite” can be pressed into sheets and used for heat and fire protection in applications ranging from building materials to consumer electronics and fuel cells.
Demand for “expandable graphite” is growing much more quickly than expected.
Fire safety is rapidly becoming a global issue in commercial and residential construction –driven by disasters such as the London Grenfell Tower tragedy and an explosion at China’s Tianjin Port in December 2015.
The cladding on the Grenfell Tower is believed to have contributed to the rapid spread of the fire that gutted the 24-storey building in west London.
Similar fires have occurred in Australia and the United Arab Emirates.
New legislation in China, the European Union, Japan and Korea has either required flame retardants in building codes and/or banned brominated and asbestos-based flame retardants.
Australia is also placing restrictions on the use of non-flame retardant materials in aluminium cladding on buildings.
Annually, China needs 40 million tonnes of flame-retardant building materials — which will contain 5 per cent expandable graphite.
That’s 2 million tonnes of expandable graphite required just by China’s construction industry.
That is more than 10 times greater demand than existing natural graphite demand from the lithium-ion battery industry.
Graphex Mining (ASX:GPX) managing director Phil Hoskins told Stockhead earlier this year that the UK, Australia and the United Arab Emirates are all “playing catch up” to Chinese regulatory policy.
“I think it will revolutionise the industry, it’s not just going to be a Chinese thing, it will become a global move,” he said.
Shortfall in supply
Global production of graphite is a long way from meeting demand.
Total global production of flake graphite in 2016 was about 860,000 tonnes — and not all of this material is able to generate expandable graphite.
Expandable graphite requires coarse flake, and historically China has accounted for about 70 per cent of supply.
However, China’s coarse flake graphite reserves have largely diminished and supply is also under threat by environmental restrictions forcing mine closures.
There aren’t that many ASX-listed players targeting the expandable graphite market.
Graphex is advancing its Chilalo project in Tanzania, while Bass Metals (ASX:BSM) earlier this year completed the recommissioning of its Graphmada graphite mine in Madagascar.
Bass announced in August that it had sold the first graphite concentrate from the Graphmada mine.
Graphmada will eventually produce 20,000 tonnes per annum of graphite concentrate when stage two is complete and Bass is assessing its options for the production of expandable graphite.
Other companies that could potentially supply the expandable graphite market include Triton Minerals (ASX:TON), Volt Resources (ASX:VRC), Walkabout Resources (ASX:WKT) and Kibaran Resources (ASX:KNL). Triton has a project in Mozambique, while the others have projects in Tanzania.