China made a significant announcement on Friday, revealing its intention to restrict the export of graphite - a mineral crucial in producing electric vehicle (EV) batteries.
This decision was conveyed jointly by the Ministry of Commerce and the General Administration of Customs, citing national security concerns. This comes barely days after the United States enforced further restrictions on the types of semiconductors that American corporations can supply to Chinese firms.
In a move slated for December, China, the unrivaled leader in graphite manufacturing and refining, is poised to implement a new requirement for export permits for a range of graphite materials, encompassing synthetic variants prized for their exceptional purity, strength, and density, alongside natural flake graphite.
According to insights from the Washington-based Institute for Energy Research, automakers are diversifying their graphite procurement. This move comes as the demand for EV batteries is surging, outstripping other industrial applications.
Key Mineral elements in an EV battery
© Photo : Investorintel.com
The latest findings from the International Energy Agency indicate a substantial rise in international electric vehicle sales, encompassing battery-powered and hybrid models.
Global sales of EVs, including purely battery-powered vehicles and hybrids, are soaring, according to the International Energy Agency, exceeding 10 million units in the preceding year - which is a 55 percent upswing from 2021. Projections point to an anticipated climb to nearly 14 million vehicles this year.
Recent data from the US Geological Survey has revealed a remarkable 250 percent surge in the global graphite market tailored for battery usage since 2018. Notably, China took center stage as the leading graphite producer worldwide, commanding an estimated 65 percent of the total production last year.
Graphite finds wide-ranging applications beyond electric vehicles (EVs), with notable uses in industries such as semiconductors, aerospace, chemicals, and steel production.
For well over a year, the US has tightened trade restrictions on China, with its European and Asian counterparts joining the campaign. This gang-up serves to constrict Beijing's access to cutting-edge chips and chip manufacturing equipment.
In July, China introduced export restrictions on gallium and germanium, two elemental components in semiconductor production. A mere month later, shipments of these materials overseas stopped completely.
The global supply chain for vital minerals crucial in the production of electric vehicle batteries is heavily dependent on China. As per the US Department of Energy, the Asian nation is responsible for refining 60 percent of the world's lithium and an impressive 80 percent of cobalt.