Graphite is an excellent conductor of heat and electricity and has the highest natural strength and stiffness of any material known to man. It is a key ingredient in aviation, automotive, steel and plastic industries. High-purity large-flake graphite is also essential for the production of the lithium-ion batteries, where demand is growing rapidly due to the evolution of electric cars. In fact, there is 10 times more graphite than lithium inside a lithium-ion battery.
The supply/demand fundamentals that make graphite attractive as an investment are similar to those of rare earth metals. The British Geological Survey listed graphite, along with rare earth metals, as those at most risk of global supply disruption. Industry experts report that China’s 2010 graphite global market share was around 75%. In an effort to retain its graphite resources, China has restricted its graphite supply and has imposed a 20% export duty plus a 17% VAT. As a result, graphite prices have started to rise, particularly for graphite flake styles which are now commanding between $2,000 and $3,000 a ton depending on flake size.
But the really exciting driver of investment demand in graphite is the future potential of ‘graphene’, which is composed of tightly bound carbon atoms.
Graphene is the thinnest and strongest material ever developed. It is 200 times stronger than steel and several times tougher than a diamond. Graphene conducts both electricity and heat better than copper. Many believe it will soon replace silicon in semi-conductors and researchers claim it is the most important substance to be created since plastic.
Graphene was first isolated by Professors Konstantin Novoselov and Andrew Geim at Manchester University in 2004. The pair used sticky tape to strip away thin flakes of graphite, then attached it to a silicon plate which allowed the researchers to identify the tiny layers through a microscope. They were awarded the Nobel Prize in Physics for 2010 “for groundbreaking experiments regarding the two-dimensional material graphene.”
Graphene could lead to mobile phones that you roll up and put behind your ear, high definition televisions as thin as wallpaper, and bendy electronic newspapers that readers could fold away into a tiny square.
Graphene has the potential to make solar panels several times more efficient, semiconductors several times faster and aircraft a fraction of their current weight. It will also play a key role in emerging consumer electronic technology and has the potential for countless stealth military applications.