ADVERTORIAL
The World’s “Forgotten” Battery Material Demand is Projected to Skyrocket 1,437% by 2030
Editorial | Feb 8, 2023 | Tech
Yet today, the US doesn’t produce any graphite — the largest component in lithium-ion batteries and the metal critical to the next generation of technological breakthroughs.
This innovative company is helping change that. With mining rights to America’s only proven flake and vein graphite site, this company is securing America’s supply chain for this critical strategic metal.
“(Batteries) are called lithium-ion — but really it should be called nickel-graphite. Because it’s mostly nickel and graphite.” – Elon Musk
Today, humanity is attempting the greatest collective project since the early days of the industrial revolution.
A transition away from a fossil fuel economy to renewable energies.
The process is already well underway. Electric Vehicle (EV) sales are increasing at a rapid pace — going up around 29% every year, with growth accelerating over time.
Solar power is expected to grow from $176 billion last year, to $256 billion by 2028.1
Wind is jumping as well — approximately doubling in the US since 2013, and projected to nearly quadruple by 2050.2
Other countries are seeing even more rapid growth.
And there is one thing that all of this clean tech has in common.
The need for battery storage.
EVs run on batteries. Solar plants and wind farms need batteries to store power for when the sun doesn’t shine, or the air is still.
Investors have been jumping at the chance to get in on this trend — investing heavily in lithium and other battery metals that support our transition to a clean energy economy.
But many investors are missing the biggest opportunity.
While lithium gets the press, it is actually graphite that will prove the biggest winner in the clean economy.
After all, while lithium-ion batteries have made lithium famous, only about 3% of the batteries are made of lithium.
The largest single component in these next-gen batteries? That’s graphite — which makes up nearly 30% of lithium-ion batteries.
In fact, the average EV uses 146 pounds of graphite to make its batteries — 29% of total battery material, and by far the most used component.
Unsurprisingly, this also makes graphite the metal with the greatest projected growth over the next decade.
Benchmark Mineral Intelligence projects EV battery demand for graphite to go up 1,437% by 2030.
All told, the various battery metals are expected to see supply jump 500% as a whole by 2050, in an attempt to keep up with demand.3
This isn’t surprising when you consider the scale of the transition our cars are undergoing.
In 2022, EV sales made up about 10% of all vehicle sales — up from 8.3% the previous year.4
That’s a huge jump from last decade, when EVs made up 1% of sales or less.
But it’s nothing compared to what’s to come.
The International Energy Agency forecasts that there will be a combined 125 million EV cars and trucks on the road over the next decade.5
Given that there will be more vehicles on the road in general in coming years, that means the EV market will multiply more than 10x over the next few decades.
That requires a lot of graphite.
But graphite isn’t just essential to EV production. It is also an essential component for solar panels.
It is essential for the batteries that variable energy sources require — like solar, wind, and tidal energy.
It is essential for the Internet of Things as well — most of which connect to the internet using components made with graphite, and which can only be free of wall plugs thanks to graphite-powered batteries.
And there are future applications on the way as well.
One Of The Wonders Of The Modern World
We’re only at the beginning of understanding the many uses of graphene, the highly processed version of natural graphite.
It is already proving an essential ingredient in some cancer-killing medical treatments.6
Graphene is more conductive than ordinary graphite, making it an essential input for high-end electronics that require speed and efficiency.
And graphene is in testing for a variety of new applications — everything from water purification, to lightweight bulletproof armor, to glowing wallpaper.
Graphene also sells with highest profit margins within the graphite sector — which gives an extra boost to high-purity graphite deposits, like those found in this company Ruby Project in Montana.
More on that later.
The important point here is, graphite is in high demand — so high that there aren’t enough projects in place to keep up.
Indeed — graphite is facing the most serious shortfalls over the coming years, out of all the clean tech metals.
This is the ideal set-up for a multi-year secular boom.
In fact, the dependence of clean tech and high tech applications on graphite is so great, the US has listed graphite as one of 35 critical strategic metals on7 which the US economy depends.
It is already in use by our military, and its use is likely to grow over the coming years, as more weapons rely on high-tech electronics, and more defensive materials are made from graphene.
At this point, access to graphite is a matter of critical importance. One that will grow more acute as demand surpasses supply.
That is why now is the ideal time to learn more about one little known junior explorer.
The Right Plan at the Right Time
To begin with, this company owns the rights to the richest known graphite deposit in the US.
Located in southern Montana, the Ruby Project was an active graphite mine for the first half the 20th century.
When it became cheaper to source graphite overseas, production shut down — but make no mistake, there is still a lot of graphite in the ground.
The most recent samples taken from the Ruby Project show graphite in concentrations of 95%-98%.
That is an extremely rich find — with graphite of high enough quality that it is the perfect precursor to graphene.
The Ruby Project is also ideally located to ship all over the country. It is right next to the Dillon railway station, with easy access to Tesla’s Gigafactory, Georgia’s coming battery factory, and the many others being built around the country right now.
The Ruby Project is also right next door to a new solar plant facility — one that will be in need of graphite.
Right now, the Ruby Project is undergoing more extensive exploration, and is sending out numerous samples to over 20 customers already lined up.
You see, because graphite performance is so dependent on the characteristics of the local metal, it takes two years on average for a potential client to assess and test any new supplier.
The company has a number of interested clients already six months into the review process. They expect the Ruby Project to be operational by 2025 or at the latest 2026, when those clients come online.
But the Ruby Project is not just attractive because it is a proven mine, with customers already lined up. It also is the only known site in the US that produces both flake and vein graphite.
Both kinds are important — because both fill different needs. And, when properly processed, both can prove enormously profitable.
Which brings us to the other part of the plan.
Not Just a Mine
Purely as a mining play, the Ruby Project is a good investment.
But this company doesn’t even see the Ruby Project as the most profitable part of its business.
That’s because this company is also building a processing plant for graphite — which offers an opportunity to increase profit margins considerably.
Consider — in Brazil, they are currently extracting graphite at a 90%+ concentration. That costs about $600/tonne to produce, and sells for $1,000-$1,200 a tonne.
If you then further refine that graphite — shaping and densifying it — you would spend about $3,800 refining the graphite, and sell it for $7,000-$10,000 on the open market today.
And if you take it one step further — refining graphite into a multi-layer graphene — it would cost $4,400 a tonne total, but sell for $15,000-$25,000 a tonne.
This company is building a plant capable of refining to all of these levels.
Which one is used will depend on the input — different types of graphite are better suited to different types of refining.
But, with the Ruby Project, this company should have graphite suited for every level of refinement.
In fact, they are bringing in graphite from elsewhere to begin refining and processing — as that will likely be the most lucrative aspect of the company’s business.
And could allow them the necessary cash flow until the Ruby Project is online.
With a $50 million facility, this company can process and sell 20,000 tonnes a year.
When the Ruby Project comes online, it is conservatively expected to have 4 million tonnes proven, at a minimum of 10%+ concentrations (which would be refined to purer concentrations).
The final number could easily be 10 times that amount. That makes for a minimum 20 year runway of high profit margin operations, at the absolute lowest end.
But again, that is not the entire story.
Doing Things the Right Way
This company takes seriously its stewardship of the Ruby Project.
That’s why they are using the most ecologically friendly methods around.
It is creating a quarry — not a mine — so that less land is disturbed.
That which is disturbed receives remediation. After the graphite is removed, all remaining rocks and minerals are put back in place, to minimize effects on the landscape. And that reclaimed land is then soiled and planted with native flora — creating a landscape that will appear nearly untouched.
It only makes sense to perform in an ecologically responsible way, if your company is part of the clean tech supply chain.
In fact, this company can extract graphite using a quarry pit that only measures 100 yards by 200 yards — like having four football fields next to each other.
Taken as a whole, this company is a tremendous value. It’s sitting on a multi-billion resource, and creating a plant that can crank out 20,000 tonnes of material annually at up to $25,000 a tonne. Similar companies trade many multiples higher.
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1https://finance.yahoo.com/news/global-solar-power-market-size-092500852.html
2https://www.energy.gov/map-projected-growth-wind-industry-now-until-2050
3https://www.worldbank.org/en/news/press-release/2020/05/11/mineral-production-to-soar-as-demand-for-clean-energy-increases
4https://www.teslarati.com/electric-vehicle-sales-2022/
5https://www.cnbc.com/2018/05/30/electric-vehicles-will-grow-from-3-million-to-125-million-by-2030-iea.html
6https://www.grapheneuses.org
7https://www.usgs.gov/news/national-news-release/interior-releases-2018s-final-list-35-minerals-deemed-critical-us
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