Graphite also called “black lead” is black, soft to the touch, and has been around and in various uses for hundreds of years. New uses are being found continually, and some have called it the “perfect” mineral. It is conductive, a dry lubricant, resistant to high temperatures, and one of the strongest substances known to man.
Graphite is found in three forms all having to do with size -crystalline flake, amorphous, and lump.
Graphite deposits can be found in Canada, Brazil, Europe, India, and China. The leader in graphite production is China with over 80% of the worlds production. Two countries the United States and Europe have classed graphite as a strategic metal.
Graphite is used in:
- Lead for pencils
- Ceramic paint
- Refractory molds
- Brake Linings
- Foundry Facings
- Dry Lubricants
- Nuclear Reactors
- Lithium Ion batteries, in smartphones, laptops, hybrid-electric cars
Graphite has been reported as the next “big thing” with the demand for lithium ion batteries. Each hybrid-electric car requires approximately 40 pounds of graphite. Graphite Stocks have hit new highs recently, while gold and silver have hit two year lows. Global demand for graphite is expected to increase.
China, who produces over ¾ of the world’s graphite is consistently cutting exports and adding tariffs on exports.
New graphite mines are needed.
Tips for investing in Graphite Stocks:
1) Management – Look at the track record and history of management
2) Cash – How much money does the company have in the treasury
3) Quality of deposit (economics) – Size and grade of the deposit
4) Stage of company – exploration, feasibility studies, or production