Why graphene is called a ‘wonder material’ and which stocks are dabbling in it
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Scientists are finding more and more uses for the so-called “wonder material” graphene — and some battery developers are even backing it against lithium-ion for powering electric cars.
Graphene — a single layer of carbon atoms made from graphite — is a fantastic conductor of electricity.
Two professors at the University of Manchester discovered the material in 2004 during a “Friday night experiment” session when they used sticky tape to separate graphite fragments to create graphene flakes one atom thick.
>> Scroll down for a list of ASX stocks with graphite exposure, courtesy of leading ASX data provider MakCorp
The material is now used in electronics, sensors, aircraft, green tech solutions – possibly even wallpaper that can generate electricity, industrial robotics and sporting equipment.
McKinsey consultants recently predicted graphene could replace silicon in computer chips within 10 to 25 years — though there is much research yet to be done.
“Overall, optimistic scenarios show market value potential for graphene semiconductors to be around $70 billion by 2030,” McKinsey predicted.
Development of graphene-based energy storage has been underway for several years — though large-scale production remains expensive.
Spanish battery developer Grabat Energy has demonstrated graphene batteries that can increase the range of electric vehicles to 800km – double the range of Tesla cars and three times the range of Nissan and Renault models.
These graphene batteries are 20 to 30 per cent smaller and can be charged in just five minutes.
Grabat makes batteries for the home, drones, electric cars and even bikes.
Plenty of opportunities
The global graphene battery market is still in its infancy, with various forecasts putting it at about $US100 to $US130 million within five years or so.
Meanwhile there are plenty of other market opportunities for ASX-listed players like Archer Exploration (ASX:AXE), First Graphene (ASX:FGR), Talga Resources (ASX:TLG) and Hexagon Resources (ASX:HXG), which have all shown they can make graphene out of their graphite.
Archer this week revealed it can make a graphene-based ink that can be used to draw computer circuits on flexible films — said to be a $US2 billion market.
Talga is working on making concrete that can conduct electricity so electric cars can charge on the road.
First Graphene last week inked a deal to supply graphene to coolant maker FlexeGRAPH so it can speed up battery charging and keep computers cool.
Hexagon, meanwhile, has also proven it can produce graphene from its McIntosh project in Western Australia.
Graphite also gets a kickstart
Graphite demand is on the rise because of China’s continued effort to curtail environmentally damaging production.
Market forecaster Roskill sees the production inspections and temporary closures continuing for the rest of this year, which will impact the Chinese natural flake graphite supply chain.
“The spherical graphite sector in particular has been hard hit,” Roskill said.
Spherical graphite is the key component of the anode of a lithium-ion battery.
The global production of graphite and spherical graphite is currently dominated by China.
“Although both flake and spherical graphite have been in a state of considerable overcapacity in China, sudden and continued closures have left producers unprepared in recent years,” Roskill said.
This led to a 30 per cent year-over-year drop in Chinese flake graphite in 2016.
Roskill says production recovered in early 2017 but fell back again with a new round of closures in mid-2017.
“This pattern appears to have repeated in 2018 with some recovery early in the year followed by closures in May.”
This could lead to higher graphite prices later this year.
Increased demand for graphite in lithium-ion batteries is predicted to underpin graphite demand growth of 5 to 7 per cent annually between 2017 and 2027.
Lithium-ion batteries use about 40 times more graphite than lithium.
Majors cutting back
Big graphite producer Syrah Resources (ASX:SYR) said on Monday that it expects 2018 natural flake graphite demand to increase 10 per cent over last year to 780,000 tonnes.
The market is also forecast to be in deficit by 2019/2020 as global electric vehicle penetration increases.
At the same time, Syrah has cut its 2018 production target for its Balama graphite mine in Mozambique to 135,000 to 145,000 tonnes from 160,000 tonnes.
That is good news for emerging producers like Triton Minerals (ASX:TON), which is also building a mine in Mozambique.
The company recently inked a letter of intent with one of the world’s largest engineering and construction companies, China’s MCC International, to build the processing facility and other infrastructure at its flagship Ancuabe project.
Triton has also secured a provisional environmental licence that allows it to fast track the project.
Battery Minerals (ASX:BAT), meanwhile, is currently courting potential backers interested in financing its Montepuez graphite project, which is also in Mozambique.
Mozambique, in case you hadn’t guessed, is a popular spot for Aussie explorers because it has larger flake graphite, which earns them more dollars.
Battery Minerals is working to square away the funding it needs for its Montepuez project after a $US30 million funding deal with Resource Capital Funds fell through.
The company wants to ship an initial 45,000 to 50,000 tonnes a year of flake graphite starting in the second half of next year.
Here’s a recent table of ASX-listed stocks with exposure to graphite (prices from July 9):
Swipe or scroll to reveal the full table. Click headings to sort