Mine purchases set to ‘transform’ Canada-based Northern Graphite

This will take Northern Graphite from being a junior miner to a producer, although they will enter a relatively tight market

Canada-based Northern Graphite plans to quickly develop its Bissett Creek mine in the province of Ontario and to develop downstream graphite projects, once it has made the jump to becoming a producer with the purchases of two further mines, chief executive officer Greg Bowes has told Fastmarkets.

Northern Graphite is set to acquire the already operational Lac des Iles graphite mine in Quebec, Canada, and the Okanjande graphite deposit/Okorusu processing plant in Namibia, both from Imerys, and make the step from being a junior miner to a producer.

“The acquisition of Imerys’ natural graphite assets will transform Northern from one of 20-25 junior developers looking for financing into the only North American graphite producer and the third-largest outside of China, behind only Syrah Resources and Nacional de Grafite,” Bowes said on January 5. “It is truly transformational for the company.”

Northern will enter a relatively tight market for its material, however.

Lac des Iles will produce as much as 15,000 tonnes per year of graphite concentrate over the next three years.

“There are several development-stage projects but they are two to three years away from production [in the] best case,” Bowes said. “Any company looking for graphite supply in the shorter term has few options, and Northern is now one of them.”

The purchases will put two deposits each producing 80,000-100,000 tpy in the company’s hands.

“The Lac des Iles mine in Quebec provides an immediate customer base and market share, and visibility into the market, including pricing,” Bowes said. “And we expect to have the Namibian operation back on line in less than a year.”

The acquisitions from Imerys mean that Northern will quickly reach capacity for 50,000 tpy and it expected to add 25,000 tpy from Bissett Creek.

Bowes expected that Northern’s share price would be buoyed by the acquisitions – it is listed on the Toronto Stock Exchange – and that, combining this with cash flow from its new producing operations, it will be able to finance construction of the Bissett Creek project.

The company planned to start production from Bissett Creek at a rate of 25,000 tpy and to keep its output within volumes that could be readily absorbed into the market, rather than pushing to reach capacity as quickly as possible and risk creating an oversupply.

“A number of our peers are modelling 100,000-tpy projects, which is too much, too soon,” Bowes said. “Many of those projects will be needed in the future, but it is difficult to convince investors to give you the money now, before higher prices and higher demand actually materialize.”

Production from the Bissett Creek and Namibian projects could be stepped up to 100,000 tpy each, however, in response to anticipated higher demand from the electric vehicle (EV) market.

“It’s a little like the tortoise and the hare,” Bowes said, in reference to the fable in which a slow starter wins the race because of a faster competitor’s over-confidence. “A lot of graphite juniors have been making a lot of noise and issuing a lot of press releases but not actually doing much. Northern has been relatively quiet, and then announced a transaction which has enabled the company to leapfrog all the competition in terms of time to market.”


Political and societal changes in North America and Europe mean that there is considerable importance placed on securing production of graphite for battery anodes.

Current prices meant, however, that it was challenging for a mine reliant on fine flakes to be profitable.

“It is much more challenging for new projects targeting the battery market with fob China prices for fine flake [-194] at not much more than $700 per tonne,” Bowes said. “Higher prices are needed to stimulate the development of the multiple new mines that are required for the automakers to achieve their sales forecasts. It happened with lithium and cobalt, and it will happen with graphite. That is the history of commodity markets.”

Fastmarkets’ latest price assessment for graphite flake, 94% C, -100 mesh, fob China (-194), was $760 per tonne on January 6.

Prices for -194 fob China have risen by $240 per tonne over the past year from $520 per tonne on January 7, 2021.

Northern Graphite plans to sell high-quality flake into industrial markets, where it said that it can achieve reasonable, profitable margins, rather than to focus on the anode sector.

The company expected further price rises for fine flake in response to increasing demand from the anode sector over time, and for this to go on to support prices for larger flake sizes.

“Higher prices for fine flake used in battery markets will also push up the prices for larger flake sizes; otherwise, producers will just grind it all up into anode material,” Bowes said. “But it is possible that the premium for large flake will narrow.”

Over the past 12 months, the price premium for -194 material over graphite flake 94% C, +80 mesh, fob China (+894), has narrowed from $470 per tonne (88.68% of -194 at the start of 2021) to $440 per tonne (57.89%).

Prices for -194 material have been supported by increased demand for material from the anode sector in China, while new demand streams for larger flakes sizes such as +894 have been slower to develop.

“Fuel cells, flow batteries and fire retardants are potentially very big markets for large flake graphite, and it will partly depend on how quickly these develop,” Bowes said.

The outlook for fine flake graphite was expected to be good because consumption for the anode sector continues to ramp up in China, absorbing spare capacity there.

“A number of forecasters, including me, have been predicting that rising battery demand would use up excess production capacity in China and lead to higher prices,” Bowes said. “We have repeatedly been proved wrong, but this is looking like the year when we finally reach the inflection point where the supply/demand curves cross. Twenty percent battery demand growth per year will do that.”

This sense that strength from the fine flake sector will cascade into larger flake sizes has bred confidence that graphite prices will continue to increase.

“Graphite last had its ‘day in the sun’ in 2012 and it will happen again, in the same way it has for lithium and cobalt,” Bowes said. “We have seen it with most commodities, and graphite’s turn is coming.”


In line with many graphite miners, Northern Graphite also plans to develop downstream.

“A big priority with Northern is value-added processing of mine concentrate for specialized industrial markets. These processes involve micronization, purification and expandable graphite,” Bowes said. “We think there is some ‘low-hanging fruit’ here and the ability to capture more margin in the short term.”

At present, China dominates the production of active anode material for the anode market but several graphite producers in North America and Europe were moving into the space.

Northern was also developing its own projects in the anode sector, as well as graphene. “Remember the tortoise and the hare,” Bowes said.

Natural versus synthetic

The role of graphite in the anode market is often characterized as a competition between natural and synthetic material. Bowes, however, does not see the anode sector as facing a decision between one and the other.

“The world needs a lot more of both to meet electric vehicle (EV) demand, and in many respects they are complementary,” he said. “The best anode material from the South Koreans and Japanese is a blend of both. The Chinese have typically used synthetic anode material but are now increasingly ‘cutting it’ with natural, because of its lower cost, higher capacity and much smaller environmental footprint.”

He sees synthetic graphite production as more vulnerable to shutdowns in China than natural material, which is mined. “It has huge energy requirements and is an obvious target for power rationing,” he said.

Additionally, he thinks that synthetic graphite from China has other disadvantages compared with natural graphite, especially for original equipment manufacturers (OEMs) seeking a sustainable product.

“It also has much greater emissions issues, and most Chinese power is coal-based so it’s a double whammy for western buyers concerned with environmental, social and corporate governance issues,” Bowes said.

There are several sources of natural graphite active anode material emerging outside of China, with active support from national governments and the EU. But supply of synthetic graphite would be more difficult to ramp-up.

“There are very few Acheson furnaces producing synthetic graphite left in the west, and it would be very expensive and time-consuming to build more – just think of the permitting that would be required,” Bowes said. “Many more 100,000 tpy graphite mines will need to be developed.”

The most significant advantage of synthetic graphite for anode material manufacturers is that it is more consistent than natural graphite.

But Bowes believed that this problem could be solved by sourcing from one high-quality mine rather than using multiple sources.

“One 30GWh battery plant, such as the Tesla gigafactory or GM/LG Chem in Ohio [in the United States], requires 80,000 tpy of natural graphite – and there are more than 200 such plants in the pipeline,” Bowes said. “Pair one plant with one high-quality graphite mine and the problem is solved.”

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