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A new analysis by Fastmarkets Metal Bulletin Research looks into the future of graphite mining, paying special attention to the relative advantages and disadvantages of synthetic graphite versus natural graphite.

“From a performance perspective, EV automakers prefer synthetic graphite, citing its superior fast charge turnaround and battery longevity. EV automakers are targeting a 10-year battery lifespan, with synthetic graphite better suited to longevity,” the report states. “The manufactured nature of synthetic graphite also gives the material an advantage in terms of consistency of supply quality relative to natural graphite.”

But every upside has a downside and according to Fastmarkets, producing synthetic graphite has quite a few drawbacks including the fact that it is a costly, power-intensive and environmentally unfriendly process.

“Natural graphite enjoys a cost advantage relative to synthetic graphite, with natural graphite roughly half the cost of synthetic graphite. The increased use of silicon in anodes is still largely under development but in the future, if this technology is more widely adopted, natural graphite performs better than synthetic graphite with silicon in the anode,” the review reads.

In addition to the cost issue, synthetic graphite supply is centred in China, which is at odds with North American and European automakers’ desire for more localized supply.

According to the market intelligence firm, although natural graphite supply is also dominated by China, with approximately 62% of total supply in 2020, new natural graphite projects are more diverse, with numerous projects in Africa helping to diversify the supply base, and potential projects in North America and Europe helping to provide the localization of supply to major automakers.

“Both synthetic graphite and natural graphite will remain critical materials for anodes in the EV battery industry, with the supply of both materials forecast to rise to meet surging demand from the EV sector,” the analysis points out. “The ability of graphite supply to rise with demand in the coming years will also help to keep prices less volatile than in other battery raw material markets and will protect the industry from substitution by competing anode technologies in the longer term.”