Beowulf's Grafintec seeing opportunities in China export ban

Beowulf Mining updated the market on its graphite strategy on Friday as it looked to capitalise on a new, restrictive regulatory move from China.

On 20 October, authorities in China announced the imposition of export controls on natural and synthetic graphite, including graphite anode materials, to take effect from 1 December.

The AIM-traded firm said the decision would affect the global battery industry, as graphite anodes are integral components of lithium-ion batteries (LIBs) and various other battery technologies.

It said China currently held a dominant position, supplying over 70% of the world’s graphite and refining more than 90% of the graphite anodes used in LIBs.

Analysis by Benchmark Minerals Intelligence suggested that this Chinese policy could disrupt non-Chinese anode production manufacturers relying heavily on China’s feedstock materials.

Beowulf said it could also incentivise anode manufacturers outside of China to seek alternative sources for raw materials.

In response to the developments, Beowulf said its wholly-owned Finnish subsidiary Grafintec was establishing a graphite processing facility.

The facility in the GigaVaasa area within the Korsholm municipality of Finland would be dedicated to producing coated spherical graphite - a crucial material for enhancing battery performance and cost-effectiveness.

It said the location was chosen as the GigaVaasa area’s focus on energy storage and battery technologies would make it an ideal hub for Grafintec’s graphite processing and anode manufacturing.

Beowulf also noted that the EU’s Critical Raw Materials Act (CRMA) set ambitious targets for graphite production within the European Union by 2030.

The goal was to have 40% of all processed graphite used in the EU produced within the union, with 10% extracted from EU sources.

Grafintec’s strategy aligned with those objectives, starting with developing the GigaVaasa processing facility and later progressing to extracting graphite from its own natural graphite projects in Aitolampi and Rääpysjärvi.

Aitolampi, wholly owned by Grafintec, boasted a substantial natural graphite deposit with an estimated 26.7 million tonnes at 4.8% total graphitic carbon (TGC), making it one of Europe’s most extensive known flake graphite deposits.

Metallurgical testing confirmed that graphite from Aitolampi could yield high-grade concentrate suitable for graphite anode materials production, ranging from 96% to 98% TGC.

Additionally, Grafintec was exploring several early-stage graphite projects, including Rääpysjärvi, which showed promising signs of significant flake graphite mineralisation.

With numerous untested conductive zones, there was potential for a substantial tonnage of graphite mineralisation in the area.

“While the impact of the export ban imposed by China remains unclear, it does highlight the vulnerability of Europe and the rest of the world to the control China has on graphite and other minerals critical for the green transition,” said chief executive officer Ed Bowie.

“Grafintec’s strategy is to provide a secure, independent, and sustainable source of graphite for use in anodes for LIBs, which is fully aligned with the EU’s Critical Raw Materials Act.”

At 1123 BST, shares in Beowulf Mining were down 3.23% at 1.4515p.

Reporting by Josh White for Sharecast.com.