The Future of Graphite Production

By Elisabeth Razoumova ’16

graphite

With China closing over 200 flake graphite mines due to pollution concerns, the future of graphite production is threatened. China is currently the largest exporter of graphite, a raw material used mainly in lithium-ion batteries. This change can lead to a 30% increase in graphite prices in 2014, impacting industries such as electric cars and electronic gadgets.

Lately Chinese government has been pushing for more environmental regulation as air and water quality in the country continues to deteriorate. Due to the economy’s heavy reliance on production and export, the Chinese people have been hurt by the high levels of pollution emitted my production plants and mining sites. The graphite industry in China is poorly regulated and has caused landscape destruction as well as high levels of graphite dust being released into the air. The crackdown on graphite has focused on Heilongjiang province, which produced 43% of the world’s flake graphite in 2012. Many plants and mines are being shut down while others are being forced to update technology and reduce graphite dust emission.

The rechargeable battery industry is most directly threatened by the reduction in graphite production. It is predicted the demand for lithium-ion batteries will increase the total value of the industry by 52%, $41 billion, by 2018. No other country exports as much graphite as China; the next largest producer Brazil exports 10 times less. Since China has most of the graphite reserves, no one else found it necessary to invest in graphite mines. With this dependence on China for the raw material, many technology producers will be affected as well. Tesla, the popular manufacturer of electric cars, is already looking for alternative producers of graphite. Other companies that use lithium ion batteries, such as Apple and Samsung, will also face the decision of how to maintain its supply of this raw material with looming threats of price increases.

Though the closure of graphite plants seems like a drastic action, it addresses the larger problem of the long-term environmental health of China. It is predicted that China’s graphite resources, at this rate of extraction, will be depleted in less than 20 years. Moreover, graphite rain has significantly affected not only the air quality in China, but also land quality, leading to less fertile lands and reduced agricultural production. Unless the Chinese government takes these measures to improve environmental quality, raw material exports will be only one of the country’s concerns. The future of China’s growth is not solely dependent on the economy, the health of the environment and the people are crucial factors as well.

Adopting stricter environmental regulations, though costly in the long run, addresses the future of the world’s environmental health. By reducing the supply of graphite, technology companies that rely on batteries will be forced to phase out this raw material. Looking for more environmentally friendly alternatives that won’t be depleted in the near future is more sustainable and profitable in the long run.

Sources:

http://www.bloomberg.com/news/2014-03-14/teslas-in-california-help-bring-dirty-rain-to-china.html

http://investorintel.com/graphite-graphene-intel/chinas-graphite-problems-signal-opportunity-ahead-emerging-producers-west/

http://www.indmin.com/Article/3298690/Graphite-pollution-fears-spread-to-Heilongjiang-China.html

http://wallstcheatsheet.com/automobiles/graphite-might-be-the-source-of-teslas-next-headache.html/

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