https://business.financialpost.com/2014/02/27/in-mining-just-as-in-life-timing-is-everything/
Graphite, a form of carbon, has been commonly used in refractories, batteries, steelmaking, pencils, brake linings and lubricants for decades. Graphene, meanwhile, described as a one-atom thick layer of graphite that is 200 times stronger than steel and more electrically conductive than copper, is being touted as a “supermaterial,” with potential applications in an array of industries.
Now, thanks to the discovery of the only large, advanced-stage, high-grade graphite deposit in the United States, one company is poised to be the primary supplier of this essential industrial mineral to the domestic market. That company, aptly named, is Graphite One Resources (GPH-TSXV).
“It’s very exciting,” says Anthony Huston, President and CEO of Graphite One, of being positioned at the forefront of a period of growth and innovation that may rival that of silicon’s use in semiconductors, which are the foundation of modern electronics.
“It’s one of those things where when you truly start to understand it and allow your mind to really expand, you can imagine a near future in which graphite and graphene will be used extensively, all around us.
This company represents an opportunity for the US and Alaska to supply materials of critical importance to American national defense, energy consumption and competitiveness in high tech applications in the near future.”
It was while Huston and his team were mining in Alaska two years ago for a different precious mineral – gold – that they made the fortuitous connection that led them to switch to digging for graphite instead.
“We ended up having a discussion with a geologist at the time who had a lot of background information on a piece of property that he felt had a lot of graphite on it because he had worked for the U.S. Geological Survey when it examined the area many years ago,” Huston recalls.
“The property was held privately by a family, the Tweet family, and it’s been in their family for over a hundred years. Over a period of three to four months, we met with the Tweets regularly and came to an arrangement whereby we would do some work on the property, which is located on the state’s Seward Peninsula, to see what they had.”
The result was the creation of the Graphite Creek project, one of the largest known graphite deposits anywhere.
The importance of the Graphite Creek deposit and the progress made by Graphite One to develop the site have been lost in a market that has little interest in resource companies, however, says expert Lawrence Roulston in a special issue of Resource Opportunities.
But again, fortune seems to be working in Graphite One’s favour. The U.S. does not currently produce graphite and the only graphite-producing mine in Canada is set to close. Simultaneously, the world’s largest graphite producer – China, which accounts for 70 per cent of all graphite production – is limiting and taxing exports.
It would appear that Huston, we have an opportunity!
“We’ve known about graphite for many, many years but the market wasn’t there for it, and the technology that is driving graphite was not quite there,” agrees Huston, about the so-called perfect storm that is happening in the graphite marketplace.
“But as we all know, get on an airplane these days and people pull out two or three devices that have lithium ion batteries in them. And there’s 10 to 15 times more graphite in a lithium ion battery than there is lithium.”
“So when you look at it from that standpoint, graphite is going to be at the forefront of the technology drive,” says Huston. “And one thing I love to say is ‘You can never stop technology.”
A closer look at graphite and its many uses should put the potential impact of the Graphite Creek project into better perspective.
Like diamonds, graphite is a crystalline form of carbon. It is physically and chemically stable even at extremely high temperatures.
According to Roulston’s report, the biggest current use of graphite is the steel industry, where it is used for crucibles for molten steel, for electrodes in electric arc furnaces, and for moulds and other refractory applications which involve extremely high heat. Graphite is one of the few materials that will not melt or disintegrate under such extreme conditions.
Graphite is also used in brake linings, and pencils are still a small but significant market for graphite. It is an important component in fuel cells and is also essential in the latest generation of nuclear reactors.
Graphite composites, known as carbon fiber, are found in lightweight but strong products such as fishing rods, golf clubs, bicycle frames, cars and airplane fuselages.
And as alluded to, a full quarter of graphite use is devoted to batteries. Lithium ion batteries power portable electronic devices such as laptop computers and cell phones and are being used more and more in hybrid and electric vehicles.
The emergence of grapheme
But it’s in the development of graphene where the real excitement begins to take hold.
Researchers conducting experiments with graphene won the 2010 Nobel Prize in physics. The “miracle material” is very strong, light, nearly transparent and is an excellent conductor of both heat and electricity.
It is suitable for producing touch screens, light panels and maybe even solar cells. When mixed into plastics, graphene can turn them into conductors of electricity while making them more heat resistant and mechanically robust.
According to Daily Reckoning, an economic news and market commentary leader, perhaps the most important potential application of graphene is in the future of clean drinking water.
Graphene’s ability to let nothing pass through it but water makes it “the world’s greatest filter.” Graphene could easily and cheaply remove salt from seawater, potentially turning the oceans into a vast drinking supply for thirsty populations.
The projected new uses for graphene point to changes in industrial and consumer products of the same magnitude that silicon brought to modern computers and other electronic devices over the past couple of decades.
And, in fact, the future is now, as graphene is already well into commercialization in several fields.
For example, sports manufacturer Head touts the use of graphene in its tennis racquets as a major selling feature. Top players Andy Murray, Maria Sharapova and Novak Djokovic are among the athletes Head sponsors. And in an example of how small the world can be, Huston, a recreational tennis player, bumped into the No. 2 ranked men’s player in the world not too long ago.
So how exactly will Graphite One capitalize on this undeniable demand for graphite and graphene?
Its first victory was foreseeing the evolution of the graphite market and the strategic importance of a domestic supply. The key now lies in procuring higher-value graphite from its Graphite Creek site. The value of graphite ranges from a few hundred dollars a tonne to as much as $20,000 a tonne, depending on the nature of the graphite. The value is a function of the purity, the flake size and other important criteria.
In January 2014, Graphite One released the findings of its latest NI 43-101, a means of disclosure that resource companies must adhere to when reporting on their various mineral properties. The outlook for Graphite Creek is positive. The company found there to be an increase of the existing inferred resource of 68 per cent, specifically 285 million tonnes at 4.5 per cent graphitic carbon. The figure was reached after drilling along 4.8 kilometres of continuous near-surface high-grade graphite mineralization.
In other words, says Huston, “this now shows that we are the largest graphite deposit in North America.”
Along with the size of the deposit, testing shows that the material is easily concentrated and can be upgraded to high purity. As well, a high proportion of the graphite is large flake. Together, a high purity product combined with the large flake size, will fetch top prices – somewhere in the range of $3,000 a tonne.
Back to having good timing: With what amounts to a captive market and a miracle material in graphene destined to alter the way we live ready for the sourcing, Graphite One is strategically placed to benefit. For Huston, a successful entrepreneur with a background in business development and finance, there is only one more declaration to make.
“We will be the first benign mining project ever to go into production in the United States,” Huston concludes proudly. “The reason why is graphite is really about as green as you’re going to get. All the high-grade graphite is right at surface and in order to produce graphite, it’s a very simple process. And a very benign process.”
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