Rare Earth Elements (REE)

[Tommy]

Graphite Declared a Critical Raw Material in US & Europe

http://proedgewire.com/graphite-graphene-intel/graphite-week-in-review-the-confirmation-of-graphite-as-a-critical-material/

Graphite, the ‘humble’ material most commonly associated with an HB pencil, has been officially confirmed by no less than the US State Department, British Geological Survey and the European Commission to be a “critical raw material”. While some analysts have interpreted this as the validation of their ‘bubble’ cries, the conditions that pushed graphite prices higher are still valid. The average mobile phone or laptop Li-ion battery already contains 20 times more graphite than it does lithium. This is hardly news for those who have followed the rapid progress made in the development of new, lighter and more powerful, Lithium-Ion, and its Lithium-Phosphate-Iron variants, which are helping to drive technological advancements from electric automobiles, consumer electronics, computers and renewable energy-including the less meltdown prone pebble-bed nuclear reactors-to mention just some of the applications. Graphite is essential in improving batteries charging times and storage capacities; the greater the improvement in these parameters, the greater the popularity of electric vehicles. Experimental graphite based cell-phone batteries, which could be coming to a hi-tech convention near you next year, could offer full charging times of less than five minutes, while having a greater charge retention capacity.

The past months, and indeed, the past week, have seen a resurging investor interest in graphite, whose prices reached unprecedented heights last spring. Graphite prices have dropped from up to USD$ 3,000/ton to USD$ 2,000/ton or less. These are still remarkable prices in the historical price context for graphite, which has typically been closer to USD$ 700 than not. One of the factors driving the value of graphite has been the fact that most of this crucial mineral is produced in China, some 70% of it. The shadow of Chinese resource nationalism then prompted a surge in new graphite projects. Graphite stocks have halved, or worse, as a consequence of continued economic uncertainty, but this should not be considered as evidence of graphite’s actual value. In China, which has the fastest growing automobile market, electric cars are more popular than they are in the West, which suggests battery demand will surge – and that’s just one application. The prospect of superfast batteries should boost graphite demand by several factors before the end of the decade. Concerns of a graphite bubble are unfounded, given the time needed to bring the new mining prospects to production. Even then, the mines that will truly make it are those able to extract high purity or flake graphite, such as the ‘Sri Lankan’ or the jumbo flake types. Petroleum derived graphite will address common applications from golf equipment to alloy additives or for the manufacturing of carbon fibre; nevertheless, naturally occurring flake graphite what the new technologies demand. Those mines need time to proceed from exploration to production and the fastest to reach production will be able to best capture the wave.

Focus Graphite (OTCQX: FCSMF) and Standard Graphite (TSXV: SGH) have uncovered very high grade resources and the former is relying on these to stimulate the emerging graphene industry. Flake sizes and purity are some of the key factors to secure the highest prices – over USD$ 2,000 a ton now. The higher the percentage of large flake and high purity mineralization (higher carbon content), the better the price a resource can command. Focus Graphite and Standard Graphite have prolific high grade resources, while such plays as Zenyatta (TSXV:ZEN) can offer graphite that is very similar in chemistry and appearance to the famed Sri-Lankan graphite variety.

The week starting November 23 was favorable to graphite share prices as reflected by the valuations of our sponsors, which recorded an overall stock price increase of 5.93%, reflecting the general higher confidence in North American markets before and after the American Thanksgiving holiday. Zenyatta, saw, and by far, the most significant market move, rising by 25.93% from CAD$ 0.54 to CAD$ 0.68. The rise was explained by the Company’s announcement that it now owns 100% of the Albany graphite deposit, acquiring the last 20% interest in the property that was still controlled by Cliffs Natural Resources Exploration.

Standard controls 12 graphite properties in proven graphite rich geological areas in (read more) Quebec and Ontario and the Company has launched an aggressive strategy in 2012, which has already yielded significant results. This week, Standard Graphite saw the biggest drop in percentage terms, at -11.76%, from CAD$ 0.17 to 0.15 even as it published more favorable results from its Mousseau East property, noting that these coincided with the outline of the known mineralization. Standard Graphite is becoming one of the major North American pure-play graphite exploration companies, controlling 100% interest in 13 graphite properties in both Quebec and Ontario. Canadian Platinum Corp. (TSX. V: CPC) also saw a significant share move, 16.67%, likely promoted by its announcement of that it completed its previously announced private placement to advance the exploration of the Company’s Brabant Lake graphite property. Galaxy Graphite Corp. (TSX.V: GXY) also saw a favorable percentage move, 12.5% as it announced encouraging sample results from its Brownell gold project in mid-November.