Numerous media outlets recently reported on the announcement from Beijing to further tighten export controls on rare earths – with a particular focus on processing technology and the manufacture of advanced semiconductors (Learn more). It largely went unnoticed that China also announced increased control over exports of materials used in batteries!
In total, export controls were announced in four areas. These concerned:
- The machinery and expertise for processing rare earths – not only the rare earths themselves, but also all the special equipment and technical know-how to convert rare earths into usable materials (which, of course, makes it all the more difficult to relocate the processing of rare earths from China)
- High-performance batteries – especially those with more than 300 Wh/kg, which are needed for long-range electric vehicles and advanced drones. And here again, export controls for all factory equipment needed to manufacture them.
- The materials inside batteries – both graphite anodes and cathode materials (the two electrodes that are essential for the functioning of batteries). The export controls also apply to the special equipment for manufacturing all these components.
- Industrial diamonds and cutting tools – the ultra-hard materials that are ubiquitous in precision manufacturing, for example for cutting silicon wafers for computer chips.
(Source: Entrepreneur and China expert Arnaud Bertrand on X)
Chinese Export Controls Have the Greatest Impact on Anode Material!
And as Matt Fernley, a renowned industry analyst at https://www.batterymaterialsreview.com/, also stated on X, while this is significant news for many sectors, he believes that the impact in the area of graphite and anode materials is likely to be the most profound. According to Fernley, China controls 99% of the market for these materials. This means that Beijing’s dominance here is significantly higher than with rare earths!
The problem? No graphite, no batteries, the expert explains. Although lithium-ions are the technology, graphite is needed for the anode. This means that the few companies working to develop anode material or synthetic graphite outside of China are crucial for the Western battery industry!
Vertically Integrated Graphite Technology Company EcoGraf Moves Now in Focus
According to Ferney, these include Syrah Resources, Talga Resources, NextSource Materials and Novonix, as well as the Australian EcoGraf (WKN A2PW0M / ASX EGR), which we at Goldinvest.de have been following for years! In our view, Managing Director Andrew Spinks’ company is one of the most exciting players in the global market for battery anode materials. With a consistent strategy of vertical integration – from the mine to recycling – EcoGraf is positioning itself as an important partner to the international battery industry. The aim is to use the hydrofluoric acid-free EcoGraf technology to provide environmentally friendly, high-purity graphite for the global expansion of electric mobility and energy storage. More information is available at: https://goldinvest.de/unternehmen/ecograf-ltd/
In any case, according to the expert from Battery Materials Review, there were numerous warnings that Beijing could take this step – and even a test run a few years ago. But nobody really paid attention to it back then, Fernley said. Hopefully this time it will be different and the market will pay more attention to the topic – and to EcoGraf!
