In March 2016 I had the opportunity to visit a leading North American research and development company, focused on materials and components relating to energy-storage devices. I was invited to visit the facility by Alabama Graphite Corp (AGC) (TSX.V:ALP, OTCQX:ABGPF), to see how AGC’s development of coated spherical purified graphite (CSPG) is progressing, and to get a better understanding of the battery prototyping and production processes.

For competitiveness reasons, the invitation was issued with the proviso that I not identify the company that I visited, or the personnel that I interviewed, under the terms of a strict non-disclosure agreement. The company (which I will call EngineeringCo for the purposes of this article) assists a number of players in the critical-materials space with the development of value-added processes, with particular expertise in Li-ion batteries (LIBs). EngineeringCo was at pains to make sure that the only work that I saw during the visit, pertained to processes and components relating to and produced from, AGC natural-flake graphite.

I was able to take a number of photographs during my visit, which are included below (click on the thumbnails to enlarge the images). Also included is a separator / electrode cross-section schematic, and other images produced by EngineeringCo and AGC that were verified during my visit.

Nevertheless, I had the opportunity to discuss a number of topics of wider interest to the use of natural graphite in LIBs with a senior scientist at EngineeringCo (whom I will call Dr. X), who is well known by many in the graphite industry and beyond, for his experience and expertise in the processing of graphite, anode production for LIBs and LIB prototyping and validation.

Regardless of the ultimate application, the early stages of natural-graphite processing are generally the same. The graphite ore is mined or excavated, and then crushed so that the contained graphite flakes can then be concentrated, via flotation. The crushed ore is typically placed into water with an additive such as pine oil or kerosene, which creates a thin film on the surface of the water. Graphite flakes are hydrophobic and lighter-weight, and being repelled by the water they remain at the surface, while the heavier rock matter simply falls to the bottom of the flotation cell. The result of these and associated processes is run-of-mine (ROM) concentrate, and historically has been the goal of most graphite juniors, looking to produce a saleable material as a result of their endeavors.

More recently, companies like AGC have realized that the way to maximize the value of their graphite ores is to apply secondary processes to this ROM concentrate, with the goal of producing so-called battery-grade graphite for LIBs. These secondary processes include purification, micronizing, spheroidizing and coating, to produce CSPG, a high-value graphite product that can be used for the anodes in LIBs. Each of these steps requires careful optimization, with the process parameters being tailored to the unique characteristics of each specific ROM concentrate.

I asked Dr. X why companies choose a particular order for completing the secondary processes of purification, micronizing, spheroidizing and coating ROM concentrate, for battery-grade materials. Not unsurprisingly, he commented that it boils down to economics. In the past, graphite mines would generally categorize their ROM concentrate into two broad categories; coarse flakes (+80 mesh / +180 µm) would be sold into higher-end applications (such as graphite crucibles, extruded shapes and steelmaking), whereas the finer material was only given secondary consideration, for use in pencils and other applications (such as powdered metallurgy, composite brake pads, forensic dispersions, zinc-carbon ‘lantern’ batteries, dry lm and liquid lubricants, and the like).

When first commercialized over 25 years ago, LIBs utilized anode-active materials comprised of mesophase carbon microbeads (MCMBs), produced via an expensive process by a single Japanese company, Osaka Gas Co. Osaka Gas was not able to reduce the cost of MCMB synthesis, in the face of LIBs becoming commodity devices, requiring commodity pricing on all of the materials and sub-components used to manufacture them. MCMBs soon lost their dominant market share to graphitized chopped carbon fibers (GCCFs), produced by Toshiba, BP Amoco and other companies.

The increasing demand for LIBs put further pressure on the anode-material producers and GCCFs were in turn superseded by two materials: graphitized, surface-coated synthetic graphite, and surface-coated natural purified flake graphite. Today, battery manufacturers increasingly favor the replacement of synthetic graphite with natural graphite in anodes for LIBs, for a number of reasons:

• The carbon-based precursor materials for the synthetic route have to be graphitized through a costly heat-treatment process. Since natural graphite is already graphitic in nature, it is an inherently lower-cost material to produce;
• LIB anodes require high-purity, spheroidal particles with sizes in the range of 10-25 µm. Synthetic graphite, once graphitized, is generally brittle and more resistant to processing, in contrast to natural graphite, which is more lubricious and amenable to such processing. This means that natural graphite is significantly easier to spheroidize than synthetic graphite (with some observers arguing that synthetic graphite cannot actually be spheroidized at all). Spheroidal particles are preferred as they contribute to maximizing the overall energy density value of the battery (more on this, later in this article);
• Most premium-quality natural crystalline flake graphite exhibits superior performance to synthetic graphite. For example, CSPG produced from AGC’s Coosa graphite deposit, with a particle size of D50 = 18.3 µm has a reversible capacity (the energy capacity that can be consistently and reversibly achieved upon cycling) of 367.21 mAh/g, just shy of the theoretical maximum of 372 mAh/g. In contrast, one of the industry’s best commercial synthetic graphite products with a particle size of D50 = 15.8 µm, has a noticeably lower reversible capacity of 347.2 mAh/g. More on these values, later in this article;

Typically the larger the flake size, the higher the purity of the untreated graphite, which resulted in the initial recent industry emphasis on the proportion of large-flake graphite in any given deposit (the more, the better, went the mantra). What this focus missed, however, is the fact that the process of converting large flakes into smaller particles of a suitable size for anode production, is expensive because any additional grinding is energy intensive, adding additional cost to processing. Indeed, the larger the flake size, the more energy is required for this size-reduction process.

If instead, the process began with smaller flake sizes, and the purity of these materials could be improved through low-cost purification techniques, finer flake material would become particularly attractive for producing battery-grade graphite, and in fact more cost effective than starting with large-flake material. Deposits would not require significant proportions of large-flake graphite to be suitable for battery-grade graphite production; having larger proportions of finer flake material could in fact be an economic advantage.

This latter approach is the one that AGC has taken with its ROM concentrate. Dr. X pointed out that the flake sizes in AGC’s Coosa graphite deposit are fairly evenly distributed. Instead of trying to convert all of this material into battery-grade graphite, a simple screening filter could separate the ROM concentrate into -100 mesh / -150 µm flake, for battery applications, with the remaining +100 mesh / +150 µm particles for traditional higher-end applications. Further screening to produce +80 mesh / +180 µm, +50 mesh / +300 µm and +32 mesh / +500 µm fractions could be applied, to further differentiate the coarse-flake material for specific end-use applications.

Battery-grade graphite requires high purity for effective operation. Traditional purification processes include baking the graphite with sodium hydroxide, and the acid-leaching approach, widely used in China, to dissolve the impurities out of the graphite. In the acid-leaching process, the ROM concentrate is immersed in a mixture of hydrochloric and hydrofluoric acids. The hydrochloric acid removes oxides present as soluble chlorides, but does not react with the silica impurities that remain. Hydrofluoric acid is needed to remove the silica, in the form of soluble fluorosilicic acid. This results in large amounts of acid washings; in China these are typically not neutralized or treated but are often simply flushed into local waterways, causing damage and pollution to local aquifers and wells.

While chlorides are not noxious, the fluorides produced, at the concentrations resulting from this process, are particularly toxic. While the cost of the acids used in the acid-leach process are relatively cheap (USD 300-350 / t of graphite purified), such costs do not take into account the cost of the treatment of the waste streams that would be required of any processing plant located in a Western jurisdiction, which according to AGC may be as high as USD 5-7k / t of graphite treated, using reverse osmosis. Clearly then, the acid-leach process is unlikely to be a cost-effective approach for any environmentally responsible graphite purification plant.

Another method is a variation of the Acheson process (originally used to produce silicon carbide and synthetic graphite), which involves the placement of large quantities of ROM concentrate and coke into a pit in the ground, and running high electrical current through it via two electrodes. The high electrical resistance of the mixture causes it to heat up quickly, producing a chemical reaction that results in relatively pure graphite. Operating temperatures are in the range of 2,800-3,000 °C. The presence of fine-flaked material in such a process is potentially dangerous because of the risk of combustion. Thus the graphite has to be pelletized prior to purification, with these pellets being re-crushed afterwards, before being further processed. However, the smaller the starting flake size, the more difficult and expensive it is to pelletize the material.

Other methods include the use of fluidized-bed technology, where the graphite is continuously fed into a reaction chamber and subject to a stream of inert gas at high temperature, which causes the impurities to volatilize (convert into gaseous mists) and to be removed from the graphite, which eventually burns off (and partially settles) in the off-gas chamber / neutralization process. The removed impurities are captured via scrubbers and turned into benign products such as gypsum.

The aforementioned thermal process is typically run at 2,400-2,600 °C – higher than the volatilization temperature of the impurities found within the graphite. Such high temperatures require significant energy consumption and are thus relatively expensive.

Using a process that eliminates the need to pelletize, can be run at lower temperatures, and which avoids the pollution associated with acid leaching, is therefore essential to the cost-effective purification of finer-flake graphite.

Although EngineeringCo has access to lower-cost purification processes that are suitable for finer-flake materials, AGC had already turned to another North American company (which we’ll call PurificationCo here – again, their identity is confidential) to work on this challenge for their material. I have previously visited the facilities of PurificationCo, and had the opportunity to discuss the purification process developed for AGC, with senior staff at PurificationCo, after my visit to EngineeringCo.

According to PurificationCo, the purification process for AGC material is essentially a halogenation process, where chlorine gas is used to convert the impurities to volatile chlorides. With an appropriate system design, the chlorine gas can be recycled, resulting in a relatively inexpensive process. The process is the standard process for purification of titanium dioxide to make paint pigments, with production in 2015 of about 3 Mt of titanium dioxide. The process runs at significantly lower temperatures than those of fluidized-bed processing – resulting in significant energy cost savings.

The surface area of finer graphite flakes is higher than for coarse-flake material, and much higher than graphite pellets, and this is advantageous for a process of this type because it makes it easier for the chlorine to diffuse into the graphite particles, and to react with the impurities present.

Dr. X commented that the graphite purity obtained during the purification step must be higher than the minimum purification specification for the battery-grade graphite at 99.95 wt% C. This was confirmed by PurificationCo.

This is because there are a number of post-purification processing steps required to produce such materials. Despite efforts such as air purification and other measures, each processing step has the potential to cause minor contamination in the material, at the parts-per-million (ppm) level. For this reason, the purification process produces a 99.98%+ purity graphite, higher than the final purity specification of 99.95%+ for the finished products.

I asked Dr. X how graphite purity is actually measured. He said that a carefully measured sample of a given graphite product is placed into a low-profile ceramic crucible, loaded in a small muffle furnace, where it reacts with oxygen. This reaction produces carbon dioxide which evolves as a gas. What remains is a tiny quantity of ash which contains the non-carbon content of the graphite. This ash is then weighed and analyzed for content, to determine the purity of the original graphite.

Interestingly Dr. X commented that this process can be used to identify the source of the graphite being tested, since each deposit has a characteristic distribution of impurities. Image analysis of the ash under magnification, combined with computerized statistical analysis, allows EngineeringCo to compare a given sample with a large database of previous samples. This is a useful tool for verifying the source of materials, for buyers and end users. The company also uses atomic-absorption spectroscopy to check the elemental content of the ash, for the presence of some 19 specific elements that are particularly problematic for battery operation, if found at elevated levels in the graphite. Full-blown chemical analyses can also be conducted using standard ICP analysis.

After purification, the next process step for the AGC material is to micronize it – to reduce the average particle size to some value within the 10-25 µm range that is optimal for anodes (the specific value will depend on customer requirements). This is achieved using jet milling, where the graphite flakes are drawn into streams of high-velocity gases that cause the flakes to collide with each other and to break apart, reducing their size to the target value. The EngineeringCo folks showed me how the process is controlled by altering the duration, the gas pressure and velocity in the system, and the mass of flake material processed at any one time. Small test batches are always done before processing bulk materials, since different graphite sources can exhibit different properties during the jet-milling process. Note, micronization may also be performed before spheroidization – and, in some cases, may be required, depending on the graphite material.

Before and after milling, the particle-size distribution of the graphite powders needs to be measured, so that the appropriate set of parameters to achieve the target size value can be determined, and to ensure that the jet-milling process has been effective. This is determined using a device that passes a laser through the powder, mixed with water with the addition of a detergent. The laser light will scatter as a result of its interaction with the particles, and the distribution of particle sizes can thus be determined, via a histogram plot. Cumulative volumes are also plotted against particle diameter, on the same chart.

The cumulative volume allows the operator to determine the ‘D values’ for the sample – essentially the range of particles sizes, and an average value. The particles are modeled as equivalent spheres in the system. The D10 value corresponds to the diameter of the equivalent sphere, at which 10% of the sample consists of smaller particles. D50 is the median diameter – the diameter at which half the sample consists of smaller particles. D90 is the point at which 90% of the sample consists of smaller particles. The D10 and D90 values represent a particular range of diameter values, with the D50 value representing the average particle size. All three values are useful in specifying the characteristics of a given powder.

Once milling is complete, the resulting powder is then classified into precise particle-size-based fractions of the overall material.

The next step in the process is spheroidization – converting the graphite particles into rounded, potato-like shapes. The closer the particles are to being spherical in shape, the greater the performance of the anode in the battery. Why is this?

It has long been proven by mathematicians that the most effective way to randomly pack as many particles into a given volume as possible, is if the particles within that volume are perfect spheres. If arranged carefully, then in any given volume the maximum theoretical space that can be taken up by the spheres, is 74% of the overall volume. For randomly packed spheres, this maximum drops to just below 64%. The further away a particle is from being spherical in shape, the less efficient is the random packing of those particles into a given volume. Spiky or needle-shaped particles, for example, when packed randomly, have an efficiency of packing somewhere in the region of 30% – significantly less than that for spheres.

So why do we care? Because the anode density – the amount of actual graphite that can be packed into a given volume – directly affects the energy density of the battery. This is the amount of energy that can be stored in the battery, per unit volume of graphite (measured in Wh/l). The denser the graphite anode, the greater the energy density on a full cell level.

Dr. X commented that this is one reason why synthetic graphite for graphite anodes is so expensive, because as produced, the particles tend to be long and thin. Even the best efforts to produce spheroidized graphite from synthetic graphite result in lower capacities per unit of battery volume, because they are ultimately less spheroidal. The conversion of these needle-like shapes into spheroidal particles is more energy intensive than for natural-flake graphite, and with lower yields.

Synthetic graphite can also see lower graphitic carbon content than natural graphite. The latter affects that critical parameter of any battery anode, its reversible capacity.

As previously mentioned, the theoretical maximum reversible capacity for graphite anodes is 372 mAh / g. EngineeringCo has measured values of 367.21 mAh / g for anodes produced from AGC graphite. This compares to values of 290-330 mAh / g for typical synthetic graphite, and 340-350 mAh / g for the best anodes produced from premium-quality synthetic graphite.

Needle-like particles are also undesirable because they have a tendency to break into small pieces during processing, and if still present, those pieces may diffuse in the electrolyte during operation, to the cathode, potentially causing a short circuit. Even if this can be avoided, these pieces may absorb electrolyte, impairing the capacity of the battery because of first-cycle losses (chemical reactions at the interface of the anode during the first charge/ discharge cycle).

EngineeringCo uses a highly proprietary spheroidizing process for the AGC materials, causing the particles to smooth each other through collisions that eventually result in the desired spheroidal shape. Sharp edges present in the original flakes are broken off and are redeposited onto the surface of the spheroids. The subsequent yield of the process, according to Dr. X, is 75%+, compared to the typical yields of processes undertaken in China at 20-30%. The cost benefit of such yield improvements are self-evident, if they can be scaled.

Furthermore, the remaining 25% of non-spheroidized graphite, with a typical particle D50 of 3-10 µm, can be used as conductivity-enhancement additives in the battery cathodes. Dr. X commented that junior graphite companies generally have little appreciation for the opportunities relating to cathodes, in addition to battery anodes. Premium-performance conductivity-enhancement materials are typically worth in the region of USD 15-20k / t – significantly higher than the USD 12-14k / t that spheroidal graphite produced from natural graphite can command. These materials could also be used in the production of alkaline and zinc-air batteries, conductive paints and coatings, to name a few markets.

Ultimately the performance of the graphite, once produced, is related as previously stated, to its density in the anode. Tap density is frequently used to describe this parameter – calculated by mechanically tapping a graduated cylinder containing graphite material, until little further volume change is observed. EngineeringCo uses autotap machines to determine tap density, by recording the height of material in a container, and its mass.

Dr. X argues that a more useful parameter is the bulk density of the material, because when used to produce anodes, the graphite particles are free flowing, and are not tapped. The bulk density is the ratio of the sample mass to the volume that it occupies (including gaps between the particles), without being tapped. It is measured using a Scott volumeter. This uses a receptacle of known volume and mass, into which graphite is poured through a funnel that sits on a baffle assembly. As the graphite pours through the baffles, it fills the receptacle until it overflows. The powder is leveled off using a flat edge and then the cup is re-weighed, to determine the mass of graphite and thus the bulk density, since the volume is known.

The bulk density needs to be as high as possible because the battery anode is produced using a painting process, and is not pressed or otherwise ‘tapped’ – thus requiring particles to be as close to spherical as possible, as previously explained, for space-packing reasons. More on that process, later in this article.

Once spheroidized, the graphite particles need to be classified by size and then coated. There are a couple of important reasons for this. The first is to improve the safety of battery operation. As mentioned previously, if there are any sharp edges left at the surface of the graphite particles prior to anode formation, these may break off and diffuse to the cathode during operation, increasing the chances of a short circuit in the system at the cathode, leading to thermal runaway. ‘Smearing’ the particle surface during spheroidizing and then adding a coating reduces the probability of these sharp pieces breaking off the graphite particles in the anode, during operation.

The second reason is to reduce problems at the surface-electrolyte interface (SEI) in the anode, that result in first-cycle losses. During the first cycle in the battery, a foam layer can build up at the SEI which can reduce the reversible capacity of the battery during subsequent charge / discharge cycles. Again, the presence of small pieces of graphite can increase the thickness of this SEI layer and coating the particles helps to reduce it, by decreasing the Brunauer, Emmett, and Teller (BET) parameter for the particles. This is a measure of the effective surface area of the particles; the higher the BET surface area value, the greater the probability of sharp surfaces being present on the particles.

EngineeringCo uses a proprietary method for applying a 10 nm carbon-based coating on each of the particles, which is subsequently cured to polymerize the coating at the surface. The coating provides continuous coverage of each particle to reduce the BET surface area, while at the same time allowing the Li⁺ ions in the electrolyte to pass through small pores or channels, to contact the surface of the graphite particles in the anode. Larger molecules (such as the small pieces of graphite previously mentioned) are prevented from getting through. The ability to protect the surface of the anode without impeding the flow of Li⁺ ions is crucial for effective battery operation, and the proprietary coating allows this to happen.

The coating process is the final step in the production of the CSPG material, and the graphite is then ready to be used in the production of anodes for LIB testing.

All battery prototypes at EngineeringCo are individually produced, in either button (CR2016 or CR2032) or cylindrical (AA, 18650 or 32650) form factors, depending on the particular goals of the project. Putting together the batteries is undertaken in an argon glove box, because of the reactivity of the Li-ion electrolyte in the air. Dr. X indicated that in commercial facilities, the construction of batteries is undertaken in dry rooms which have a special atmosphere called ‘dry air’, which can be breathed by the workers in them, but which prevents the oxidation of the Li-ion electrolyte and other compounds used in battery construction.

For the cylindrical batteries, the anode, separator, and cathode components are wound together in a spiral, before being placed inside a cylinder. The anode is produced from a long strip of copper foil, typically 10 µm thick, which is coated on both sides with a paint of CSPG particles, each layer being approximately 45 µm thick. The cathode is produced from a long strip of aluminum foil, typically 20 µm thick, which is coated on both sides with a paint of one of several metal-oxide compounds, such as lithium cobalt oxide, lithium iron phosphate, lithium manganate, or lithium nickel manganese cobalt, depending on the battery configuration to be tested. These cathode layers are approximately 90 µn;m thick.

Mixed in with this cathode metal-oxide powder is approximately 8 wt% of the conductivity-enhancement additives previously mentioned, that is typically equal parts carbon black and graphite. Such additives are always included in the cathode formulations. Typically, synthetic graphite is used, though as Dr. X commented previously, there is an opportunity to use the natural graphite that remains after spheroidizing, in this additive. The additive is required to improve the conductivity of the cathode during operation, as well as to control the viscosity of the paint when it is being applied to the foil. The graphite here therefore has a different function that the graphite being used in the anode. The aluminum foil used in the commercial production of cathodes may also be coated with carbon.

In between the anode and cathode strips is a 20-25 µm thick separator strip, typically produced from an ultra-high-molecular-weight polypropylene or polyethylene film, which has a controlled level of porosity. This gives some ‘space’ for the electrolyte between the two electrodes. The overall thickness of the anode component is approximately 100 µm, whereas the cathode strip is typically 190-200 µm thick. The difference in thickness is a result of the different reversible capacities of the materials used in the anodes, with the best cathode materials having values that are less than half that for natural-graphite anodes. Therefore, the cathode thickness is approximately double that of the anode, to balance the electrochemistry of the system, during operation. The diagram included in the images below shows a schematic of the anode / cathode / separator arrangement inside the battery.

Once the spiral has been wound and placed in the cylinder, the electrolyte is added, and the cylinder is sealed via either crimping or laser welding. Button-shaped battery prototypes use disks instead of spirals inside the container, though the configuration is effectively the same as for the spiral systems. The batteries are then ready to undergo proprietary formation, followed by testing, which involves repeated charging and discharging of the batteries, to determine the first-cycle losses, reversible capacity, and any changes in characteristics over time.

By the time of my visit, EngineeringCo had previously processed over 10 kg of AGC graphite material into CSPG material, and produced at least 50 batteries from it. Multiple prototypes and tests are required to establish representative performance metrics for the batteries, and the graphite contained within them.

The visit to EngineeringCo was very enlightening and it was a great opportunity to see the operations used to produce CSPG materials from AGC’s graphite, and the process of testing and evaluating such materials in actual battery prototypes. My thanks go to EngineeringCo, Dr. X and his colleagues for hosting me, PurificationCo and to Alabama Graphite Corp. for the invitation to see these processes in action.

Disclosure: at the time of writing, Gareth Hatch is neither a shareholder of, nor a consultant to, Alabama Graphite Corp. (“AGC”). Neither he nor Technology Metals Research, LLC received compensation from AGC or from anyone else, in return for the writing of this article.

In October 2015 I paid a visit to the Coosa graphite project in the USA, being developed by Alabama Graphite Corp. (TSX.V:ALP, OTCQX:ABGPF) in Coosa County, Alabama.

Located in a past-producing region of the state known as the Alabama Graphite Belt, the Coosa project is approximately 50 miles south-southeast of Birmingham and 20 miles north of Montgomery. The project is also 30 miles northeast of the Bama Mine project, also owned by Alabama Graphite Corp (AGC).

20 miles to the northeast, AGC has its field office and core storage facility in Sylacauga, which I also had the chance to visit. Sylacauga is home to the world’s largest marble quarry, and the source of the pure, white marble used in the construction of many famous buildings and memorials in the USA, including the US Supreme Court building, the US Capitol rotunda and the Lincoln Memorial in Washington, DC.

I was hosted during my visit by Don Baxter, President & CEO of AGC, Rick Keevil, VP for Project Development and Jesse Edmondson, Project Geologist for Coosa and also Director of Community Relations.

Per the October 2015 NI 43-101 guided mineral-resource estimate for the Coosa deposit, at a 1% graphitic carbon (Cg) cut-off grade, 78.5 megatonnes (Mt) of the resource is at the Indicated level @ 2.39% Cg and 79.4 Mt is at the Inferred level @ 2.56% Cg. This results in an estimated 3.9 Mt of Cg present in the mineral resource at Coosa. The resource estimate was based on the results of 109 drill holes totaling 7,900 m (25,900 feet) and 9 trenches totaling 1,150 m (3,800 feet).

Graphite development companies typically report on the distribution of flakes sizes in their graphite deposits. Metallurgical results announced by the company in May 2015, and subsequently reported in the PEA report indicate that approximately 25-30% of the graphite present at Coosa is in the form of large flakes (+80 mesh or >180 μm). However, as we will see later in this article, AGC’s intended approach to production potentially negates the need for significant quantities of large-flake graphite to be present in the deposit, since the company’s plan is to process graphite across the range of flake sizes, into higher-value engineered graphite products.

You can see photographs taken during the visit in the galleries below (click on each image to enlarge it).

The name of the Coosa project has its roots in the local history of the area. Historically Coosa was a Native American province which included parts of present-day Alabama, Georgia, Tennessee, and South Carolina. This province gave its name to the Coosa River, which flows at the western boundary of Coosa County. The area is situated towards the southern end of the Appalachian mountain range, in the Northern Piedmont geological province.

AGC holds the mineral rights to a total of 17,000 ha (42,000 acres) of land at and around the Coosa project location. Mr. Baxter indicated that the surface rights for the Coosa Project are owned by a timber company, and are currently leased by AGC for exploration use. He commented that AGC has an excellent working relationship with this timber company and that they are supportive of the project’s continued development.

The host formation for the Coosa deposit consists primarily of schists, including quartz-muscovite-biotite-graphite schist, quartz-graphite schist, quartz-biotite-garnet schist and combinations of these. Schists are medium- to coarse-grained rocks, formed through the metamorphosis of shale or igneous rocks. The resulting foliation, or planes of weakness in the rock, makes it relatively straightforward to break up these materials for processing. Mr. Baxter commented that the quartz and other waste minerals that will result from processing these schists, could potentially be sold and used for a variety of end uses, including the production of roof shingles and the like.

Although the project location is rural, the Coosa project is well served by local roads, with interstate highway 65 less than 5 miles from the property. Coosa is close to other local infrastructure, with the nearest town just 5 minutes away from the site.

Mr. Keevil explained that the top 20-30 m (60-100 feet) of the graphite-bearing material at the Coosa deposit has been oxidized and weathered over time, resulting in a very soft rock that is easy to excavate and to process. This was confirmed during the site visit, with on-site sample materials easily crushable by hand. This weathered layer means that for a significant portion of the mine life, no drilling or blasting will be required to obtain the graphite ore; instead simple excavating equipment will be used in an open pit to get at the materials.

With one or two exceptions, junior-mining companies looking to develop graphite projects typically focus on the production of run-of-mine (ROM) concentrates, produced by beneficiating graphite ores using standard processes such as crushing, milling and flotation. ROM concentrates are typically sold directly to end-users in a number of sectors. Given the relatively low value of such materials, projects focused on ROM concentrates likely need to have high head grades in their graphite deposits, to reduce the costs of ROM concentrate production and to generate reasonable margins.

The path to greater revenues (and margins) for any future graphite producer lies in upgrading the ROM concentrate, preferably in-house, so that it can be used to produce the anodes for lithium-ion batteries (LIBs). Battery-grade graphite requires particularly high purity levels, typically greater than 99.9% Cg.

Mr. Baxter explained that the AGC business model is focused on the production of highly engineered graphite, mostly for the production of LIB anodes. Recent initiatives by Tesla Motors and others to produce large quantities of LIBs for electric vehicles and home energy storage, will require significant quantities of graphite to meet demand. In keeping with the ‘green’ credentials of such end users, such graphite will need to be produced in jurisdictions that mandate a significant degree of environmental protection, with respect to the methods used to produce engineered graphite products.

During battery operation, in order for the lithium ions in the LIB electrolyte to efficiently diffuse between graphite particles within the anodes, the particles need to be small, and this is achieved through micronization of the precursor graphite powders. Standard battery-grade graphite requires an average diameter of approximately 10-30 μm.

Such materials also need to be spheroidized – increasing the packing or ‘tap’ density of graphite particles by converting the naturally flat graphite flakes into potato-like shapes. The combination of high purity and tap density enhances the electrical conductivity of the graphite anodes, during use in the LIB.

Conventional wisdom for battery-grade graphite developers, has been to focus on graphite deposits that contain significant proportions of large (>150 μm) graphite flakes, because the purity of the graphite flakes tends to increase with flake size. However, given the additional energy costs required to micronize large flakes, the ideal precursor material would have small flake size, if it had sufficient purity levels (either as-is or through a cost-effective purification process) for the subsequent processing to be economically viable, and if it can be effectively spheroidized.

In addition to micronizing and spheroidizing high-purity graphite, battery-grade powders also need for the individual particles to be coated, typically using a non-graphitic carbon material, to reduce the specific surface area of the powder. Lowering the specific surface area increases the ability of the anode to operate efficiently in the battery in which it will operate, increasing the useful life of the battery. Just as important, it reduces the risk of a runaway chemical reaction, which could lead to a dangerous situation in usage.

Since Mr. Baxter joined the company in June 2015, AGC has transitioned its business model from that of a potential purveyor of ROM concentrates, to a potential producer of high-purity, engineered graphite. Per the Preliminary Economic Assessment (PEA) for the Coosa project, published in November 2015, AGC intends for 75% of its annual production of graphite to be in the form of coated spherical purified graphite (CSPG), for use in battery anodes, with the remaining 25% of production being sold as purified micronized graphite (PMG), for use in a variety of non-battery applications such as powder metallurgy, friction materials, and polymer, plastic and rubber composites.

Mr. Baxter indicated that the proportions of graphite going into each of the two products is related to the particle sizes that result from micronizing and spheroidizing the graphite flake, which has first been subject to a purification step. Particles with resulting sizes >10 μm are converted to CSPG via surfacing coating, and have typical Cg purities of 99.95%+. The remaining particles, with sizes <10 μm will be sold as PMG materials, and have typical Cg purities of 98%+.

The Coosa PEA assumes a 27-year mine life (mining 10% of the mineral resource estimate and focused only on the oxidized top layer of material), and that production at Coosa will start at 5,000 t / year for five years, rising to 15,000 t / year by year 7. It is further assumed that the capital costs associated with such an expansion, are funded from the free cash flow produced in the initial production period. At an 8% discount rate, this results in a pre-tax Net Present Value (NPV) of $444M or $320M post-tax (all $ in USD), and an Internal Rate of Return of 52.2% pre-tax (45.7% post-tax).

I asked Mr. Baxter how these numbers would look if the expansion did not take place (i.e. if the 5,000 t / year production rate was constant throughout the life of the mine). Such a scenario results in an NPV of $157M pre-tax ($120M post-tax) at an 8% discount rate and an IRR of 47.8% pre-tax (42.4% post-tax).

The PEA assumes that CSPG can be sold for $9,000 / t, with PMG fetching $2,000 / t. These prices are based on estimates from Benchmark Mineral Intelligence of current selling prices of $7,000-12,000 / t and $1,800-2,800 / t for CSPG and PMG products respectively.

The PEA also states an estimated operating cost over the 27-year mine life of $1,555 / t. This is a blended operating cost, covering the combined cost of production of CSPG and PMG. If accurate, these numbers would provide AGC with significant margins for its two product lines, particularly the CSPG material.

So on what basis does AGC believe that it can actually and economically produce these engineered graphite products? The company has been testing a number of processes for the purification, micronizing and spheroidizing of its graphite flake in recent months.

In September 2015, AGC announced that 99.99% Cg purities had been obtained across the full range of flake-size distributions. A conventional low-temperature thermal purification process, using chlorination, was applied by an unnamed metallurgical laboratory to graphite concentrates produced by SGS Mineral Services of Lakefield, Ontario. Recoveries of 90%+ following purification were obtained.

This announcement followed on the heels of the initiation of a pilot plant program at SGS, for the processing of a 200 t bulk sample into graphite concentrate. Mr. Edmondson said that the bulk sample came from a total of 10 pits, each providing approximately 20 t to the sample. The pits were evenly distributed across the Indicated mineral-resource area of the property, to represent the variations in grade, flake size and rock type typical to the deposit.

During my visit, Mr. Baxter indicated that tests of micronization and spheroidization processes for the purified Coosa graphite were underway. These processes were hinted at in the PEA report; a news release from the company issued in January 2016, detailed the results of downstream independent LIB tests using graphite anodes produced from Coosa CSPG materials.

The results announced in last month’s news release indicate that AGC’s micronizing, spheroidizing and coating processes were apparently successful. A tap density of 0.985 g / cm³ was achieved (anode production typically requires a minimum tap density of 0.9 g / cm³), along with a desirably low specific surface area, relative to the commercial LIBs tested.

A reversible capacity of 367.21 mAh/g and irreversible capacity loss of 5.09% were obtained for the AGC batteries, compared to 347.2 mAh/g and 6.06% respectively.

If these results can be replicated at the demo and subsequent commercial scales, AGC will have demonstrated the ability to effectively produce CSPG suitable for commercial-grade LIB graphite anodes.

During my visit to Alabama, I asked Mr. Baxter about a couple of news releases issued by AGC earlier in the year, concerning the apparent occurrence of ‘naturally occurring graphene’ at the Coosa project site. He said that samples from the Coosa site had been analyzed at the University of Alabama, and graphene with 2-10 layers had been observed. Analysis was also performed at Queens University in Kingston, Ontario, which apparently observed the graphene layers in samples obtained from the rougher flotation process applied to bulk samples of Coosa materials.

Mr. Baxter described these initial findings (announced prior to his taking the helm at AGC last year) as “interesting but somewhat academic” at this stage. The presence of multi-layer graphene, if confirmed, may indicate that the graphite present at Coosa may be more susceptible to delamination, which if the case, would present the possibility of the use of shearing during processing. However Mr. Baxter noted that AGC was firmly focused on the production of engineered graphite for battery and other applications, and not on graphene production. This was recently reiterated in AGC’s January 2016 Corporate Update, confirming that AGC has no intentions of getting into “the graphene business”.

Mr. Edmondson commented that because the Coosa project is located on private land, permitting for the project will rest at the state level, which should provide a relatively straightforward process when compared to mining projects on Federal or Crown land, elsewhere in North America. The company anticipates that the entire permitting process will require approximately six to eight months for completion. There is significant local and state-level support for the Coosa project, given the number of potential jobs that would be created from the project. The proximity to the Sylacauga marble mine means that there are significant numbers of skilled workers in the area; labor costs are relatively low in Alabama.

AGC is keen to stress its “Made in USA” credentials for a future Coosa mine; Mr. Baxter commented that the proximity of the project to current and future battery manufacturers in the USA, should give the company a key advantage in servicing such potential customers, over other projects located further afield. The company also highlights the Alabama connection on its Web site and presentations, tying in to the state’s own “Made in Alabama” campaign and the apparent advantages that this might have.

Commenting on the future mine design for Coosa, Mr. Baxter said that a goal will be for zero discharge of wastes from the mine. The site will incorporate a number of sedimentation ponds and dry-stack tailings, where waste products will be stored after thickening. All water used for processing will be recycled, with small amounts of ‘make-up’ water used if needed.

The weather in Alabama is such that winterizing of buildings on the future mine and processing site will not be required.

The initial processing mill will be located on-site at the Coosa project. The plant for purification and further processing of the mined graphite will be located approximately 20 miles from Coosa in Rockford, Alabama, to which there is direct access from the Coosa site along county roads. An existing natural-gas pipeline runs through Rockford. The proximity of this pipeline will be beneficial to the capital and operational expenditures, associated with the furnaces needed for the processing facility in Rockford.

After visiting the Coosa project site, talking with AGC management and reviewing the recent announcements from the company concerning its battery-grade pilot-plant work, I believe that AGC’s Coosa project is on a sound technical footing. The decision to go beyond the production of ROM graphite concentrate, in order to provide a ‘one-stop shop’ for its customers will serve the company well, if the price forecasts and actual operational costs are consistent with the PEA estimates. Combined with relatively modest initial production targets, AGC has a sensible and credible business model.

My thanks go to the AGC team for organizing the logistics of my visit, and to Don Baxter, Rick Keevil and Jesse Edmondson for hosting me during my time in Alabama.

Disclosure: at the time of writing, Gareth Hatch is neither a shareholder of, nor a consultant to, Alabama Graphite Corp (AGC). Neither he nor Technology Metals Research, LLC received compensation from AGC or from anyone else, in return for the writing of this article.

I recently updated the TMR Advanced Rare-Earth Projects Index, to reflect project updates since the last edition. The effective date of the latest edition is November 19, 2015. The specifics:

• On October 6, 2015, Hastings Technology Metals Limited (ASX:HAS) (formerly Hastings Rare Metals Limited) announced an updated JORC-guided mineral-resource estimate for the Yangibana project in Australia. According to the associated news release, 8.1 Mt of the resource is at the Indicated level @ 1.07% TREO and 4.2 Mt is at the Inferred level @ 1.07% TREO, both without a cut-off grade.
• On October 8, 2015, Crossland Strategic Metals Limited (ASX:CUX) announced that its previous joint-venture partner in the Charley Creek project in Australia, Pancontinental Uranium Corporation (TSX.V:PUC), has sold its stake in the project to a private Australian company 100% owned by EMMCO Mining Sdn Bhd, a private Malaysian company.
• On October 12, 2015, Hastings Rare Metals Limited (ASX:HAS) announced a name change to Hastings Technology Metals Limited.
• On October 16, 2015, the Thorium Foundation announced completion of the acquisition of the Steenkampskraal project in South Africa, formerly owned by Great Western Minerals Group Ltd. (TSX.V:GWG) before being transferred to the Douglas Trust.
• On October 30, 2015, Arafura Resources Limited (ASX:ARU) announced an updated JORC-guided mineral-resource estimate for the Nolans project in Australia. According to the associated news release, 4.9 Mt of the resource is at the Measured level @ 3.2% TREO, 30.0 Mt is at the Indicated level @ 2.7% TREO, and 21 Mt is at the Inferred level @ 2.3% TREO, each at a cut-off grade of 1% TREO.

The Index currently consists of 58 rare-earth mineral resources, associated with 53 advanced rare-earth projects and 49 companies, located in 35 regions within 16 countries.

I have also updated the pricing used in the Index data, to reflect the average monthly prices for October 2015. The underlying pricing data used are copyright © 2015 Argus Media Group, with all rights reserved and used with permission under license. You can access the updated details via the Index page.

One final note – the easy-to-remember shortcut for accessing the Index is www.RareEarths.org.

Disclosure: at the time of writing, Gareth Hatch holds no shares or stock options in any of the companies mentioned in this article, or in any publicly traded rare-earth company, nor is he doing paid consulting for any such company.

I recently updated the TMR Advanced Graphite Projects Index, to reflect two new and two updated mineral-resource estimates, announced since the last update. The effective date of the updates is September 22, 2015. The specifics:

• On March 17, 2015, Graphite One Resources Inc. (TSX.V:GPH) announced an updated NI 43-101-guided resource estimate for its Graphite Creek graphite project in the USA. According to the associated news release, 18.0 Mt is at the Indicated level @ 6.3% Cg and 154.4 Mt is at the Inferred level @ 5.7% Cg, each at a cut-off grade of 3% Cg;
• On June 17, 2015, Great Lakes Graphite Inc. (TSX.V:GLK) announced a maiden NI 43-101-guided resource estimate for its Lochaber graphite project in Canada. According to the associated news release, 4.1 Mt is at the Inferred level @ 4.0% Cg, at a cut-off grade of 2.5% Cg;
• On August 27, 2015, Talga Resources Ltd. (ASX:TLG) announced a maiden JORC-guided resource estimate for its Jalkunen graphite project in Sweden. According to the associated news release, 31.5 Mt is at the Inferred level @ 14.9% Cg, at a cut-off grade of 10% Cg; and
• On September 8, 2015, Kibaran Resources Limited (ASX:KNL) announced an updated JORC-guided resource estimate for its Meralani East graphite project in Tanzania. According to the associated news release, 7.4 Mt is at the Indicated level @ 6.7% Cg and 10.3 Mt is at the Inferred level @ 6.3% Cg, each at a cut-off grade of 5% Cg.

You can access the updated details via the Index page.

The Index currently consists of 36 graphite mineral resources, associated with 33 advanced graphite projects, 25 companies and located within 10 countries. Including the projects on the Index, TMR is currently monitoring a total of 331 graphite projects under development associated with 159 companies in 31 countries.

Disclosure: at the time of writing, Gareth Hatch holds no shares or stock options in any of the companies mentioned in this article, or in any publicly traded graphite company, nor is he doing paid consulting for any such company.

I recently updated the TMR Advanced Rare-Earth Projects Index, to reflect project updates since the last edition. The effective date of the latest edition is September 10, 2015. The specifics:

• Per a recent report from PWC, acting as the court-appointed monitor for the Sale or Investor Solicitation Process for Great Western Minerals Group Ltd (TSX.V:GWG), on July 17, 2015 ownership of the Steenkampskraal project in South Africa was transferred to Douglas Trust Reg, as part of the sale of Rare Earth Extraction Co. a Great Western subsidiary.

The Index currently consists of 58 rare-earth mineral resources, associated with 53 advanced rare-earth projects and 49 companies, located in 35 regions within 16 countries.

I have also updated the pricing used in the Index data, to reflect the average monthly prices for August 2015. The underlying pricing data used are copyright © 2015 Argus Media Group, with all rights reserved and used with permission under license. You can access the updated details via the Index page.

One final note – the easy-to-remember shortcut for accessing the Index is www.RareEarths.org.

Disclosure: at the time of writing, Gareth Hatch holds no shares or stock options in any of the companies mentioned in this article, or in any publicly traded rare-earth company, nor is he doing paid consulting for any such company.

I recently updated the TMR Advanced Rare-Earth Projects Index, to reflect project updates since the last edition. The effective date of the latest edition is August 2, 2015. The specifics:

• On May 11, 2015, Ucore Rare Metals Inc. (TSX.V:UCU) announced an updated NI 43-101-guided mineral-resource estimate for the Bokan-Dotson Ridge project in the USA. According to the associated news release, 4.8 Mt of the resource is at the Indicated level @ 0.602% TREO and 1.1 Mt is at the Inferred level @ 0.603% TREO, both at a cut-off grade of 0.40% TREO;
• On May 12, 2015, Frontier Rare Earths Ltd. (TSX:FRO) announced an updated NI 43-101-guided mineral-resource estimate for the Zandkopsdrift project in South Africa as part of a completed pre-feasibility study. According to the associated news release, 23.0 Mt of the resource is at the Measured level @ 2.07% TREO, 22.7 Mt is at the Indicated level @ 1.73% TREO, and 1.1 Mt is at the Inferred level @ 1.52% TREO, each at a cut-off grade of 1% TREO; and
• On June 17, 2015, Geomega Resources Inc. (TSX.V:GMA) announced an updated NI 43-101-guided mineral-resource estimate for the Montviel project in Canada. According to the associated news release, 82.4 Mt of the resource is at the Indicated level @ 1.51% TREO and 184.2 Mt is at the Inferred level @ 1.43% TREO, at an unspecified cut-off grade.

The Index currently consists of 58 rare-earth mineral resources, associated with 53 advanced rare-earth projects and 49 companies, located in 35 regions within 16 countries.

I have also updated the pricing used in the Index data, to reflect the average monthly prices for July 2015. The underlying pricing data used are copyright © 2015 Argus Media Group, with all rights reserved and used with permission under license. You can access the updated details via the Index page.

One final note – the easy-to-remember shortcut for accessing the Index is www.RareEarths.org.

Disclosure: at the time of writing, Gareth Hatch holds no shares or stock options in any of the companies mentioned in this article, or in any publicly traded rare-earth company, nor is he doing paid consulting for any such company.

I recently updated the TMR Advanced Rare-Earth Projects Index, to reflect project updates since the last edition. The effective date of the latest edition is April 2, 2015. The specifics:

• In November 2014, Mineração Serra Verde, a subsidiary of Mining Ventures Brasil, completed a pre-feasibility study for the Serra Verde project in Brazil, which included an upgraded NI 43-101-guided mineral-resource estimate. Per the company’s Web site, 7 Mt of the resource is at the Measured level @ 0.16% TREO, 381 Mt is at the Indicated level @ 0.16% TREO, and 521 Mt is at the Inferred level @ 0.016% TREO, each at a cut-off grade of 0.1% TREO;
• On December 17, 2014, AusAmerican Mining Limited (ASX:AIW), owners of the La Paz project in the USA, changed its name to AusROC Metals Ltd.(ASX:ARK);
• On January 22, 2015, IAMGold Corporation (NYSE:IAG) completed the sale of its Niobec niobium mine in Canada, and the associated adjacent REE deposit, to Magris Resources Inc., a private Canadian company.;
• On February 12, 2015, Greenland Minerals and Energy Ltd. (ASX:GGG) announced an updated JORC-guided mineral-resource estimate for the Kvanefjeld project in Greenland. According to the associated news release, 143 Mt of the resource is at the Measured level @ 1.21% TREO, 308 Mt is at the Indicated level @ 1.11% TREO, and 222 Mt is at the Inferred level @ 1.00% TREO, each at a cut-off grade of 0.015% U3O8. We await a response from the company on some details of the elemental breakdown, before we update the distribution and grade tables; and
• On February 23, 2015, Northern Minerals Limited (ASX:NTU) announced an updated JORC-guided mineral-resource estimate for the Browns Range project in Australia. According to the associated news release, 4.7 Mt of the resource is at the Indicated level @ 0.70% TREO and 4.3 Mt is at the Inferred level @ 0.56% TREO, each at a cut-off grade of 0.15% TREO.

The Index currently consists of 58 rare-earth mineral resources, associated with 53 advanced rare-earth projects and 49 companies, located in 34 regions within 16 countries.

I have also updated the pricing used in the Index data, to reflect the average monthly prices for March 2014, as reported by Metal Pages. You can access the updated details via the Index page.

One final note – the easy-to-remember shortcut for accessing the Index is www.RareEarths.org.

Disclosure: at the time of writing, Gareth Hatch holds no shares or stock options in any of the companies mentioned in this article, or in any publicly traded rare-earth company, nor is he doing paid consulting for any such company.

I recently updated the TMR Advanced Rare-Earth Projects Index, to reflect project updates since the last edition. The effective date of the latest edition is January 21, 2015. The specifics:

• On December 17, 2014, Tantalus Rare Earths AG (F:TAE) announced an updated NI 43-101-guided mineral-resource estimate for the Tantalus project in Madagascar. According to the associated news release, 40.1 Mt of the resource is at the Measured level @ 0.10% TREO, 157.6 Mt is at the Indicated level @ 0.09% TREO, and 430.0 Mt is at the Inferred level @ 0.09% TREO, each at a cut-off grade of 0.03-0.05% TREO without Ce. ; and
• On January 21, 2015, Tasman Metals Ltd. (TSX.V:TSM, MKT:TAS) announced an updated NI 43-101-guided mineral-resource estimate for the Norra Kärr project in Sweden, as part of a completed maiden pre-feasibility study (PFS). According to the associated news release, 31.1 Mt of the resource is at the Indicated level @ 0.61% TREO, at a cut-off grade of 0.4 wt% TREO. We await a response from the company on some details of the elemental breakdown, before we update the various tables with the new resource estimate.

The Index currently consists of 58 rare-earth mineral resources, associated with 53 advanced rare-earth projects and 49 companies, located in 34 regions within 16 countries.

I have also updated the pricing used in the Index data, to reflect the average monthly prices for December 2014, as reported by Metal Pages. You can access the updated details via the Index page.

One final note – the easy-to-remember shortcut for accessing the Index is www.RareEarths.org.

Disclosure: at the time of writing, Gareth Hatch holds no shares or stock options in any of the companies mentioned in this article, or in any publicly traded rare-earth company, nor is he doing paid consulting for any such company.

I recently updated the TMR Advanced Graphite Projects Index, to reflect three new and two updated mineral-resource estimates, announced since the last update. The effective date of the updates is January 15, 2015. The specifics:

• On October 17, 2014, Sovereign Metals Limited (ASX:SVM) announced a maiden JORC-guided resource estimate for its Duwi graphite project in Malawi. According to the associated news release, 35.2 Mt is at the Indicated level @ 7.2% Cg and 50.7 Mt is at the Inferred level @ 7.1% Cg, each at a cut-off grade of 5% Cg;
• On October 21, 2014, Triton Minerals Ltd. (ASX:TON) announced a maiden JORC-guided resource estimate for its Balama North Nicanda Hill graphite project in Mozambique. According to the associated news release, 328 Mt is at the Indicated level @ 11.0% Cg and 1,129.0 Mt is at the Inferred level @ 10.6% Cg, each at a cut-off grade of 0% Cg (i.e. no cut off);
• On November 17, 2014, Valence Industries Limited (ASX:VXL) announced an updated JORC-guided resource estimate for its Uley graphite project in Australia. According to the associated news release, 0.3 Mt is at the Measured level @ 17.92% Cg, 1.9 Mt is at the Indicated level @ 11.84% Cg, and 0.9 Mt is at the Inferred level @ 8.89% Cg, each at a cut-off grade of 3.5% Cg. In addition, the company reported a mineral resource of 0.2 Mt at the Indicated level for a stockpile of material at the Uley project, @ 6.23% Cg, with the same cut-off grade;
• On November 26, 2014, Magnis Resources Limited (ASX:MNS) announced a maiden JORC-guided resource estimate for its Nachu graphite project in Tanzania. According to the associated news release, 3.9 Mt is at the Measured level @ 5.58% Cg, 100.0 Mt is at the Indicated level @ 5.12% Cg, and 53.0 Mt is at the Inferred level @ 5.70% Cg, each at a cut-off grade of 3% Cg; and
• On December 15, 2014, Mason Graphite Inc. (TSX.V:LLG) announced an updated NI 43-101-guided resource estimate for its Lac Gueret graphite project in Canada. According to the associated news release, 19.1 Mt is at the Measured level @ 17.88% Cg, 46.6 Mt is at the Indicated level @ 16.90% Cg, and 17.7 Mt is at the Inferred level @ 17.24% Cg, each at a cut-off grade of 5% Cg.

You can access the updated details via the Index page.

The Index currently consists of 33 graphite mineral resources, associated with 30 advanced graphite projects, 24 companies and located within 10 countries. Including the projects on the Index, TMR is currently monitoring a total of 321 graphite projects under development associated with 151 companies in 30 countries.

Disclosure: at the time of writing, Gareth Hatch holds no shares or stock options in any of the companies mentioned in this article, or in any publicly traded graphite company, nor is he doing paid consulting for any such company.

Usually around this time of year I would have already posted an update on the export quotas issued by the Chinese Ministry of Commerce (MOFCOM) to rare-earth element (REE) producers in China.

Not so this year.

The twice yearly announcements on the specifics of the allocations were always met with a degree of interest that far outweighed their real importance. It was the illusory nature of the export quotas and the complete misreading of the 2010 quota allocations, by entities outside of China, that led to the completely unnecessary, yet unfortunately destructive run up (and subsequent crash) in prices for these materials in 2010 and 2011.

On December 31, 2014 MOFCOM announced that dozens of products previously subject to export quotas would instead now be subject to an export licensing regime. Perhaps the fact that REEs can be found cheek to jowl alongside live cattle, frozen meat, tungsten, sand, motorcycles and paraffin, to name but a few of the commodities listed, will finally correct the notion that some folks have of REEs as unique, precious snowflakes in the grand scheme of nefarious Chinese strategy. Or perhaps not…

We must remember that the export quotas were only one aspect of the overall export regime for REEs and other commodities, subject to the 2014 WTO ruling against China and a subsequent rejected appeal. Another important aspect was the imposition of export tariffs on REE products. The mid-December announcement from the Chinese Ministry of Finance, detailing the export tariffs for REEs in 2015, shows that such tariffs are still alive and well. At the very least, they indicate that China is taking a phased approach to the elimination of its export-control system for REEs in a manner that satisfies the WTO ruling. The continuation of export tariffs on REEs comes in the face of reported recent discussions on the imposition of a new value-added tax on REEs, as a replacement for the revenues generated by export tariffs. There are some indications that a switch over may occur later in 2015, but for now, the export tariffs are here to stay.

Since the announcement on the elimination of export quotas, we have seen dozens of inevitable headlines proclaiming the death of Chinese control over its exports of REEs. The reality is that China is still as much in charge of its REE supply chain as it ever was. An additional MOFCOM announcement indicated that REEs are now to be exported through only 9 designated ports. Export licenses will be “handled” through a Special Commissioner’s Office within MOFCOM, on a case-by-case, shipment-by-shipment basis. A number of sources in China indicate that to date, there is little guidance available to would-be exporters on the criteria to be fulfilled, for an export license to be issued, beyond the presentation of a sales contract with a buyer outside of China.

Such ambiguity would seem to resonate with the third aspect of the WTO complaint and ruling against China, concerning the lack of transparency internally with respect to specific rules and regulations pertaining to exports. Perhaps more details will be officially forthcoming, or perhaps not.

It is unlikely that the announced changes will have any meaningful impact on the “bandwidth” of REE exports that are exported from China via non-official channels (i.e. smuggled out). A number of the recent news stories have lamented that the elimination of export quotas will see increased exports and further decreases in REE pricing. I disagree. Perhaps some of the smuggled materials will now go through official channels, especially in the wake of the ongoing consolidation of the Chinese REE industry into six conglomerates; but the overall supply, through official and non-official channels, is unlikely to be affected.

Furthermore, the discussed new VAT proposed would be at similar levels to the existing export tariffs for REEs, thus the ongoing imposition off export tariffs and the subsequent change over, if and when it happens, is not likely to affect FOB China (export) prices either.

So for the time being at least, it is business as usual for Chinese REE exports.

Update (02/01/15): since this article was originally published, the authorities in China announced plans to eliminate the export tariffs on REEs in May 2015.