Alabama Graphite Corp. Com ABGPF

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According to Northern Graphite Corporation, only flake graphite which can be economically rounded and upgraded to 99.9% purity can be used to make the spherical graphite (“SPG”) used in Li ion batteries. The process is expensive and wastes 70% of the feedstock flake graphite. As a result, spherical graphite currently sells for between $3-4,000/tonne or three times the price of high quality flake graphite.

https://northerngraphite.com/graphite-labs/graphite-growth-potential/lithium-ion-batteries/

Lithium Ion Batteries

Li ion batteries are smaller, lighter and more powerful than traditional batteries. They also have no memory effect and a very low rate of discharge when not in use. As a result, most portable consumer devices such as laptops, cell phones, MP3 players and digital cameras use Li ion batteries and they have now moved into power tools as well. While the batteries used are small, the markets are large and growing rapidly regardless of general economic conditions. Annual growth is estimated at 20%+ and total graphite demand 100,000tpa which is already 20% of the flake market.

However, Li ion batteries are now being used in hybrid electric vehicles (“HEV”), plug in electric vehicles (“PEV”) and all electric vehicles (“EV”) where the batteries are large and the potential demand for graphite very significant. While this has created a great deal of excitement in the lithium industry, the investment community is only now beginning to focus on other materials used in Li ion batteries and by weight, graphite is the second largest component. Graphite is the anode material in the battery and there are no substitutes. In fact, there is 10-15 times more graphite than lithium, in a lithium ion battery and because of losses in the manufacturing process, it actually takes 30-40 times as much graphite.

There is up to 10 kgs of graphite in the average HEV and up to 70 kgs in an EV. Every million EVs, which is about 1.5% of the new car market, require in the order of 100,000 tonnes of graphite to make the batteries which represents a potential 20 per cent increase in flake graphite demand. China alone plans on having five million EVs by 2020. Annual flake graphite production will have to triple if EVs became even 5% of the new car market.

Only flake graphite which can be economically rounded and upgraded to 99.9% purity can be used to make the spherical graphite (“SPG”) used in Li ion batteries. The process is expensive and wastes 70% of the feedstock flake graphite. As a result, spherical graphite currently sells for between $3-4,000/tonne or three times the price of high quality flake graphite.

Almost all Li ion battery manufacturing currently takes place in Asia. However, it has become a very big priority for the Obama administration due to the decline in the US domestic car industry. The recent congressional stimulus bill includes tens of billions of dollars in loans, grants, and tax incentives for battery and HEV research and manufacture to jump-start US industry. Michigan has awarded $544M in tax credits to four Li ion battery companies with plans to invest more than $1.7 billion in manufacturing facilities.