RSS Subscribe10 reasons I own Graphite One – Richard Mills
2025.03.06
Graphite One (TSXV:GPH, OTCQX:GPHOF) has received strong support from the US government for developing its “made in America” graphite supply chain anchored by Graphite Creek in Alaska, the largest graphite deposit in the country and one of the biggest in the world.
Graphite One plans to develop a “circular economy” for graphite. Its supply chain strategy involves mining, manufacturing and recycling, all done domestically — a US first.
China has imposed restrictions on Chinese graphite exports. Exporters must apply for permits to ship synthetic and natural flake graphite.
Increased usage of natural graphite is expected from non-Chinese sources, who are seeking to establish ex-China supply chains.
Graphite One is at the forefront of this trend. The company has significant financial backing from the Department of Defense, the Export-Import Bank of the United States, and political support from the highest levels of government, including the White House, Alaska senators, Alaska’s governor, and the Bering Straits Native Corporation.
The project isn’t near a salmon fishery and it has the backing of local communities. Nome, Alaska has a long history of resource extraction.
Graphite One could take a leading role in loosening China’s tight grip on the US graphite market by mining feedstock from its Graphite Creek project in Alaska and shipping it to its planned graphite anode manufacturing plant in Voltage Valley, Ohio. Initially, G1 will produce synthetic graphite and other graphite products.
Graphite One could supply a significant portion of the amount of graphite demanded by the United States, reducing or even eliminating dependence on China.
Below are 10 good reasons for taking a position in Graphite One:
1/ Graphite’s importance. A mineral found in metamorphic and igneous rocks, graphite is formed when carbon is subjected to high temperature and pressure in the Earth’s crust. Graphite is also one of the naturally occurring forms of crystalline carbon. It has a black or sometimes greyish color.
Graphite is soft and cleaves easily with light pressure. It is greasy and features low specific gravity.
Due to its natural strength and stiffness, graphite is an excellent conductor of heat and electricity. It is also stable over a wide range of temperatures.
Graphite is chemically inert, meaning it is not affected by a majority of reagents and acids.
Graphite is found all over the world in its natural form and in high quantities. It is usually classified into three forms — flake, crystalline, and amorphous — depending on the source of the mineral. (BYJU’S)
Graphite is found in a wide range of consumer devices, including smartphones, laptops, tablets and other wireless devices, earbuds and headsets.
The electrification of the global transportation system doesn’t happen without graphite.
That’s because the lithium-ion batteries in electric vehicles are composed of an anode (negative) on one side and a cathode (positive) on the other. Graphite is used in the anode.
The cathode is where metals like lithium, nickel, manganese and cobalt are used, and depending on the battery chemistry, there are different options available to battery makers. Not so for graphite, a material for which there are no substitutes.
Graphite is the largest component in batteries by weight, constituting 45% or more of the cell. Nearly four times more graphite feedstock is consumed in each battery cell than lithium and nine times more cobalt.
Needless to say, graphite is indispensable to the EV supply chain.
Besides being integral to electric car batteries, e-bikes and scooters, graphite is used in pencil lead, lubricants and repellants, paints and refractories.
Graphite is ideal for defense purposes thanks to its unique ability to withstand high temperatures. It can be found in aircraft, helicopters, ships, submarines, tanks, infantry fighter vehicles, artillery and missiles. Graphite is also used in electric-vehicle batteries.
A report from the Hague Centre for Strategic Studies found that natural graphite and aluminium are the materials most commonly used across military applications and are also subject to considerable supply security risks that stem from the lack of suppliers’ diversification and the instability associated with supplying countries.
The report says aluminum and natural graphite are the two most used materials in the defence industry and can be found in aircrafts (fighter, transport, maritime patrol, and unmanned), helicopters (combat and multi-role), aircraft and helicopter carriers, amphibious assault ships, corvettes, offshore patrol vessels, frigates, submarines, tanks, infantry fighter vehicles, artillery, and missiles. These materials are used in components such as airframe and propulsion systems of helicopters and aircrafts as well as onboard electronics of aircraft carriers, corvettes, submarines, tanks, and infantry fighter vehicles. The impact of supply disruption would be very significant, given the multiplicity of aluminum and natural graphite applications.
2/ Impending shortage
BloombergNEF expects graphite demand to quadruple by 2030.
The International Energy Agency (IEA) goes 10 years further out, predicting that growth in graphite demand could see an 8- to 25-fold increase between 2020 and 2040.
Given that demand for graphite is accelerating at a rate never seen before, the impending supply crunch could get serious.
Analysis by Benchmark Mineral Intelligence projects that natural graphite will have the largest supply shortfalls of all battery materials by 2030 — even more than that of lithium — with demand outstripping expected supplies by about 1.2 million tonnes.
And this is just counting EV battery use only; the mining industry still needs to supply other end-users. The automotive and steel industries remain the largest consumers of graphite today, with demand across both rising at 5% per annum.
BMI previously stated that flake graphite feedstock required to supply the world’s lithium-ion battery anode market is projected to reach 1.25 million tonnes per annum by 2025. For reference, the amount of mined graphite for all uses in 2023 was 1.6 million tonnes.
BMI has also said up to 97 average-sized graphite mines need to come online by 2035 to meet global demand.
3/ Graphite Creek mine. On Jan. 30, 2025 Alaska Governor Mike Dunleavy identified Graphite Creek as one of two Alaska projects during his State of the State address, which highlighted the economic and security implications of critical minerals development.
“The Graphite One deposit, the largest in North America, north of Nome, continues to move ahead with support from a Defense Department grant,” Governor Dunleavy told the Alaska legislators. ”Construction could begin in that project by 2027 and the mine could be producing as early as 2029.”
Graphite Creek in early 2021 was given High-Priority Infrastructure Project (HPIP) status by the Federal Permitting Improvement Steering Committee (FPISC). The HPIP designation allows Graphite One to list on the US government’s Federal Permitting Dashboard, which ensures that the various federal permitting agencies coordinate their reviews of projects as a means of streamlining the approval process.
4/ Feasibility Study
The PFS was based on the exploration of only one square kilometer of the 16-km deposit, meaning that G1 could potentially increase production by a factor several times the proposed run rate of 2,860 tonnes per day.
“The continued expansion of our Graphite Creek resource will support our plan to quadruple the annual production from our PFS study,” said Graphite One Senior Vice President of Mining Mike Schaffner.
In 2023, an 8,736-meter drill program focused on upgrading and expanding the deposit, and collecting data for the Feasibility Study, saw 52 holes drilled.
The company said the results demonstrated exceptional consistency of a shallow, high-grade graphite deposit that remains open both to the east and west of the existing mineral resource estimate.
“The results — 52 graphite intercepts over 52 holes — confirm our confidence that Graphite Creek is truly a generational resource of strategic value to the United States, and we wish to thank the Alaskan Government, our funding partners, local stakeholders, and communities for their continued support in advancing this critical asset,” Huston said in the Oct. 23, 2023 news release.
The 2024 field program was developed to gather the remaining data required to complete the company’s Feasibility Study. Three drill rigs were used to gather the geotechnical information needed to engineer the pit walls and foundations for the processing facility, tailings/waste rock facility, and other infrastructure.
The Feasibility Study detailing a larger mine at Graphite Creek and a processing plant in Ohio is expected to be out in the first half of 2025.
Only about 10% of the mineralized trend has been drilled so far.
5/ Breaking dependence on China. China is by far the biggest graphite producer at about 80% of global production. It also controls almost all graphite processing, establishing itself as a dominant player in every stage of the supply chain.
China also accounts for 98% of announced anode manufacturing capacity expansions through 2030, according to the International Energy Agency.
China’s metal dominance — Richard Mills
Automakers and defense companies have been raising alarm bells over the fact that the United States hasn’t mined any graphite since the 1950s, and even if it had, it would need to be shipped to China for processing.
Graphite is:
- One of 14 listed minerals for which the US is 100% import dependent.
- One of nine listed minerals meeting all six of the industrial/defense sector indicators identified by the US government report.
- One of four listed minerals for which the US is 100% import-dependent while meeting all six industrial/defense sector indicators.
- One of three listed minerals which meet all industrial/defense sector indicators — and for which China is the leading global producer and leading US supplier.
The US has no security of supply for graphite. They have clearly reached a point where much more graphite needs to be discovered and mined IN THE US.
Graphite One could supply a significant portion of the graphite demanded by the United States.
Consider: In 2023, the US imported 83,000 tonnes of natural graphite, of which 89% was flake and high-purity.
Based on G1’s Prefeasibility Study (PFS), not the Feasibility Study which is expected in the first half of 2025, the Graphite Creek mine is anticipated to produce, on average, 51,813 tonnes of graphite concentrate per year during its projected 23-year mine life.
6/ Receipt of government funding. Two Department of Defense grants have been awarded to Graphite One, one for $37.5 million, the other for $4.7 million — the latter to develop an alternative to the current firefighting foam used by the US military and civilian firefighting agencies, using graphite sourced from Graphite Creek.
G1’s Feasibility Study, due in the first half of 2025, is 75% funded by the DoD.
In addition, G1 qualifies for federal loan guarantees worth $72 billion.
In October of 2024 G1 received a Letter of Interest (LI) for up to $325 million in debt financing from the Export-Import Bank of the United States (EXIM), to go towards construction of its AAM manufacturing facility in Ohio. The funds would come from EXIM’s “Make More in America” and “China and Transformational Exports Program” (CTEP) initiatives.
EXIM’s funding commitment is conditional upon completing the application, due diligence and underwriting process and receiving all required approvals.
G1 expects to submit a formal application to EXIM in 2025.
7/ Political support
President Trump has announced that his administration will “pursue a path towards US energy dominance” that will require substantial amounts of minerals, from tungsten in exploration drill bits to copper in electrical transmission lines.
On Jan. 20, President Trump issued Executive Orders (“EOs”) on energy, critical minerals and the importance of Alaska to US critical minerals development and American energy independence.
On Jan. 21, the day after Donald Trump was inaugurated as the 47th president, the White House issued a memo stating that there will be a freeze on the disbursement of funds from the Inflation Reduction Act and the Infrastructure Investment and Jobs Act, also known as the bipartisan infrastructure law.
Graphite One is unaffected by Trump’s executive orders to freeze all federal aid, or to put it in another way – Graphite One has a tremendous funding advantage over competitors due to its prescient decision not to apply for IRA or bipartisan infrastructure law funds – the reason being that, should Trump be re-elected president, these programs might be canceled.
Also, there is no indication from recent news about Trump’s executive orders that EXIM’s potential financing of up to $325 million of Graphite One’s project’s costs will be canceled.
Alaska senators, Alaska’s governor, and the Bering Straits Native Corporation all support the project. In 2023 G1 closed a $2 million private placement from BSNC to support development of the company’s Graphite Creek deposit.
8/ Ohio AAM plant. Graphite One is more than a mining company. It plans to invest $435 million to build a graphite anode manufacturing plant in Trumbull County, Ohio, between Cleveland and Pittsburgh. The plant will use synthetic graphite until natural graphite anode active material becomes available from Graphite Creek, according to the March 20, 2024 news release.
Active anode materials (AAM) is a term referring to materials that are being developed for use in various energy storage and convergence technologies; the primary focus is on improving battery performance.
AAMs are typically carbon-based materials, such as graphite powder or silicon oxide. Graphite is the most common AAM because it’s inexpensive, has a stable structure, and is highly conductive. Silicon anodes have a higher energy density, but they have a shorter cycle life and can expand in volume.
According to Insight Ace Analytic Pvt. Ltd., the AAM market was valued at USD$3 billion in 2023 and is predicted to triple by 2031 to $9.57B.
A report by Polaris Research valued the global anode market at $11.5 billion in 2023. By 2032, revenues should reach $123.7B, with the industry growing at a CAGR of 30.9%.
The main reason for such a high growth rate is increasing EV adoption.
“The lithium-ion battery anode market is experiencing notable growth due to electric vehicle acquisition. The growing approval of plug-in hybrids and EVs instantly translates into growing demand for lithium-ion batteries,” states Polaris Market Research via PR Newswire.
Another report by Markets&Markets projects anodes will grow from a $12 billion industry in 2023 to $46.5 billion in 2028.
The report concurs with Polaris Research’s observation that electric vehicles are the key demand driver, but adds that industrial applications are increasingly adopting lithium-ion batteries for their efficiency and clean-energy benefits.
9/ Anode deal with Chenyu. In October 2024, G1 signed a technology license and a consulting agreement with Hunan Chenyu Fuji New Energy Technology Co. Ltd. (Chenyu).
Founded in 2019, Chenyu is a high-tech company specializing in R&D, production, sales and professional services of lithium-ion battery materials including artificial graphite anode, natural graphite anode, silicon carbon anode materials and waste battery recycling. The company currently has five production facilities and an R&D center.
Chenyu would grant G1 an exclusive license to certain AAM technologies in return for the payment of royalties; offer advice and guidance in designing, constructing, commissioning and operating the Ohio AAM plant in return for the payment by G1 of milestone fees; agree to offer G1 advanced AAM technology prior to offering it to other AAM manufacturers in North America; and agree to offer G1 the right to license Chenyu’s AAM technology in Europe, the United Kingdom and, surprise, the Kingdom of Saudi Arabia before offering it to other AAM manufacturers.
10/ Offtake with Lucid. The importance of graphite to vehicle electrification is highlighted by the fact that EV manufacturers are signing deals directly with graphite miners such as Graphite One.
Graphite One and EV maker Lucid sign historic Supply Agreement — Richard Mills
On July 25, 2024, G1 announced it had entered into a non-binding Supply Agreement with Lucid Group, Inc. (NASDAQ: LCID), a California-based electric vehicle manufacturer, for anode active materials (AAM) used in EV batteries.
“This is a historic moment for Graphite One, Lucid and North America: the first synthetic graphite Supply Agreement between a U.S. graphite developer and U.S. EV company,” said Huston, adding:
“G1 is excited to continue pushing forward developing our 100% U.S. domestic supply chain. We appreciate the support from our investors and the grant from the Department of Defense. Subject to project financing required to build the AAM facility, the Supply Agreement with Lucid puts G1 on the path to produce revenue in 2027, and that’s just the beginning for Graphite One as work to meet market demands and create a secure 100% U.S.-based supply chain for natural and synthetic graphite for U.S. industry and national security.”
Lucid’s flagship vehicle is the Lucid Air, which has been recognized with a number of awards, including MotorTrend 2022 Car of the Year, World Luxury Car of the Year, and Car and Driver 10 Best. Lucid is preparing a factory in Arizona to begin production of the Lucid Gravity SUV.
The five-year, non-binding Supply Agreement provides for 5,000 tpa of synthetic graphite. Sales are based on an agreed price formula linked to future market pricing, as well as satisfying base-case pricing agreeable to both parties.
Graphite One Inc.
TSXV:GPH, OTCQX:GPHOF
2025.03.05 share price: Cdn$0.93
Shares Outstanding: 137.8m
Market cap: Cdn$129.2M
GPH website
Richard (Rick) Mills
aheadoftheherd.com
Subscribe to AOTH’s free newsletter
Richard owns shares of Graphite One Inc. (TSXV:GPH). GPH is a paid advertiser on his site aheadoftheherd.com
This article is issued on behalf of GPH
Legal Notice / Disclaimer
Ahead of the Herd newsletter, aheadoftheherd.com, hereafter known as AOTH.Please read the entire Disclaimer carefully before you use this website or read the newsletter. If you do not agree to all the AOTH/Richard Mills Disclaimer, do not access/read this website/newsletter/article, or any of its pages. By reading/using this AOTH/Richard Mills website/newsletter/article, and whether you actually read this Disclaimer, you are deemed to have accepted it.
