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Is This The Hottest Acreage In The Lithium Rush?

As global Lithium demand is…

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Why Nevada Is The Next Lithium Hot Spot

As the Lithium market keeps…

The Graphite Game Changer

$12.2 trillion will be invested in global power generation in the next 35 years and the Tesla Gigafactory is just the beginning

According to a Bloomberg report earlier this year, $12.2 trillion will be invested in global power generation in the next 25 years, with renewables counting for 2/3s of the investment. Tesla (NYSE: TSLA), as witnessed by its multi-billion dollar gigafactory, is the first to strike.

Tesla CEO Elon Musk’s goal is to be building 500,000 electric-vehicles (EV) by 2020. With this planned production rate in the latter half of the decade, Tesla alone will require today’s entire worldwide production of lithium-ion batteries. There are two primary raw materials necessary to build lithium-ion batteries; lithium and graphite. In fact, it is estimated that 15 times more graphite than lithium is required in a lithium-ion battery.

In a clear indication that Tesla has begun sourcing the raw materials needed for its Nevada gigafactory, last week Tesla signed a 5-year lithium supply agreement with Vancouver based Pure Energy. This puts Tesla well on its way to meeting its lithium supply needs, however, the company still faces the task of securing its graphite needs for the gigafactory.

Tesla can acquire this through the supply of synthetic graphite, which is very expensive (up to $20,000 per tonne) and requires fossil fuels to manufacture. Both of which go against Tesla’s announced mandate to reduce the cost of battery production and move away from reliance on hydrocarbons.

Alternatively, they can secure off-take from a high quality, graphite deposit, much like they did with the Pure Energy lithium deposit (which would be aligned with their corporate mandate). Become vertically integrated; own your raw material; guarantee quality control and secure your future supply. Given the substantial concerns surrounding Chinese graphite mines (world’s largest graphite producer) it is quite likely that Tesla will seek a North American (possibly even American) source for its graphite.

Enter Graphite One (GPH:TSX-V, GPHOF:OTCQX) and its Graphite Creek Deposit in Alaska.

The Graphite Creek Deposit is America’s biggest ‘large flake’ graphite deposit with an indicated graphite resource totalling nearly 18 million tonnes at 6.3% Cg with a 3% cut-off in addition to an inferred resource totalling 154.36 million tonnes at 5.7% Cg. It is a high grade, high quality, potential 100-year life graphite mine in the United States with excellent infrastructure. Graphite Creek also offers direct ocean access to the western seaboard:

(Click to enlarge)

There have been signs of accumulation in Graphite One shares (GPH.V) in recent weeks with volume increasing substantially along with price:

GPH shares have risen above the 200-day moving average for the first time since May. A further rally above minor resistance near .120 would indicate a nascent uptrend has begun.

With renewable energy clearly representing the largest global investment opportunity over the next few decades there stands to be a huge opportunity in profiting from the raw material suppliers to the renewable energy space. The investment opportunity in electric-vehicles is both massive and multi-faceted, and there are sure to be dozens of big winners along every step of the electric-vehicle food chain.

In fact, global leaders are meeting in Paris as we speak, and an accelerated push on clean energy will undoubtedly be at the core of their attempts to slow climate change. All of this points to a rapidly growing EV market in the years ahead, which means robust demand for batteries. Tesla is not the only company scrambling to build out battery manufacturing capacity. Companies like Panasonic Corp. (OTCMKTS: PCRFY), LG Chem (KRX: 051910), Johnson Controls (NYSE: JCI), and the joint venture AESC, backed by Nissan Motor Corp. (OTCMKTS: NSANY), currently dominate the EV battery market. They will all need steady supplies of graphite and lithium in the years ahead. Lithium and graphite suppliers will have no trouble finding customers as EVs flourish.

At its current modest C$25 million market capitalization Graphite One (GPH.V) stands a very good chance of being one of these big winners.

By Joao Peixe of Oilprice.com

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Leave a comment
  • Gantal on November 30 2015 said:
    "Given the substantial concerns surrounding Chinese graphite mines "

    Which are...?
  • Carl on December 02 2015 said:
    I looked at Graphite ones website hopeing to see how they process thier Graphite. All Graphite One seems to be is allot of pretty pictures. What and where are they actually mining.
  • ray on December 02 2015 said:
    tanzania will be the key.
  • Philip Branton on December 03 2015 said:
    Hmm.............graphite is the highest grade of COAL. Considering the huge short in the coal commodity sector, it is evident that there is a huge "play" to actually corner the coal market. This article is being perceptively deceptive. In fact, the deceptive point not made in this article is the connection between graphite, COAL and the coming 3D carbon nano-tube printing manufacturing economy. Once certain "3D" printers hit the open market, printing your own battery will be as easy and cloning a CD or DVD..! Question is....will Office Depot or Lowes or Walmart sell the printers and "ink" to be able to do it? What is very telling is the fact that no form of media is telling its readers or viewers or listeners that it can be done ....TODAY...! Lithium Batteries, Liquid Metal Batteries, carbon fiber "homes", you name it.........heck, with 3D scanners, each part of a Tesla can be re-printed in your garage to be built yourself...!
  • Jasper on January 12 2016 said:
    Eagle Graphite, In BC Canada 99.995% already tested, they have a processing plant and are already players in the market, and the Graphite is in the sandstone, no hardrock.It would be a huge mistake to overlook this Great Canadian Company.

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