Chinese bureaucrats are pulling out the red tape on the graphite pipeline, which is crucial to battery manufacturing. And it’s coming at a time when Tesla and other EV makers are trying to keep pace with rising demand.
However, the obscure export permit hurdles could spur more business for suppliers like Australia’s Syrah Resources, a company developing projects around the world to meet demand — and a key Tesla graphite source, according to Reuters.
If Syrah can successfully fill holes in the supply chain, it could give the West security for a resource that is crucial to EVs and other tech. The issue is important enough that the White House made a fact sheet outlining a strategy to break “dependence” on China for graphite and other elements.
“What China is saying to the West with this decision is that we are not going to help you make electric cars, you have to find your own way to do that,” Northern Graphite CEO Hugues Jacquemin said in the Reuters report.
China’s graphite industry is a juggernaut, refining more than 90% of the planet’s supply. The “export controls” are for the type of graphite used to make battery anodes, a key part of the power pack. The rules could increase prices outside of China, all per Reuters.
“This bold and unexpected move by China in graphite has taken us by surprise, arriving far sooner than anyone could have predicted,” Kien Huynh, chief commercial officer at energy sector company Alkemy Capital Investments, said to Reuters.
The rules could be in response to international pressure on Chinese enterprises regarding their “industrial practices,” as well as to challenge the country’s dominance, per the news agency.
There has been an international slew of rule-making between the West and Far East. Reuters reported that European leaders are considering tech tariffs against Chinese companies, while the U.S. is restricting access to certain semiconductors and artificial intelligence.
In response, Syrah is bracing for a run on graphite as buyers expect supply disruptions. The company is constructing a plant in Louisiana to make anode materials from graphite it mines in Mozambique. Reuters also noted that Australian and U.S. officials are in talks about securing a stable graphite supply chain.
It seems to add up to a big opportunity for Syrah.
“[T]he announced graphite export controls in China are increasing government and private sector attention on the strategic importance of Syrah as a unique ex-China natural graphite and [anode material] supplier in the battery supply chain,” the company said in the Reuters report.
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