More graphite on the table but market softens

As a bevy of juniors announce further developments in the promising graphite sector, some experts have questioned the hype.

World demand for graphite is only about 1mt at the moment, but scientists believe the unique form of carbon could, down the road, become one of the most widely-utilised minerals in the technology landscape.

The potential use of graphite in batteries, steelmaking, machinery and electrodes, as well as the development of graphene – dubbed the world’s strongest and most malleable substance by some – could see further demand from the 3D printing sector, as well as use in medicine, electronics, desalination, molecular science, energy storage and production, and dozens of other industries.

African graphite developments are, on an almost daily basis, coming to the market with more news about big graphite discoveries, and progress in setting up new mining operations.

Triton Minerals, for example, just announced its graphite deposit in Mozambique contains just under 156mt of the mineral. Syrah Resources estimates its nearby deposit holds 117mt of graphite.

Add those to the list of other juniors exploring new graphite deposits – Metals of Africa, OGI Group, Bisan, IMX Resources, Stratos, Buxton, Archer Exploration, Lincoln Minerals and Kibaran, to name a few – and you’re looking at a huge potential increase in the global supply of graphite.

But without the kind of boom that some scientists predict, global demand for graphite is only expected to rise to about 2.6mtpa by 2020.

So some experts have questioned whether all the hype surrounding graphite juniors is justified.

Since climbing dramatically around July this year, many Australian-listed graphite junior stocks have declined quite significantly.

After peaking at $5.99 a share on July 11, Syrah Resources has seen its stock price slide to $3.50 this morning.

Aforementioned Triton Minerals is worth 32c a share today, after peaking at 86c in July.

And another promising junior, Kibaran, has watched its own price slide from 53.5c in July to just 27c at the minute.

So while technologists are getting excited about the future potential of graphite and graphene, share traders have lost confidence since the boom earlier this year.

What do you think? Tell us in the comments below.