In recent days, China has announced that it intends to introduce new limitations on the export of graphite, one of the raw resources fundamental for the functioning of new electric vehicles and for the general accompaniment of the world towards real sustainability fueled by clean energy.
A few months ago, China had also adopted similar initiatives for other raw materials of a certain importance, in particular gallium and germanium. The new measures – which will come into force on December 1 – will introduce new export controls, which could make it much more complex for importing countries (such as Europe) to supply some essential raw materials for the successful completion of the global ecological transition.
The global repercussions of this choice, once again, demonstrate the solid dominant position achieved by China in the field of raw materials and supported not only by excellent capabilities in the extraction, processing, and refining of materials but also by precise political choices which over the last few decades have strongly focused on the mining sector, now widely considered by the Beijing authorities as one of the most important and strategic for the competitive development of the country in the coming years (particularly in the medium and long term). Together with the United States, China probably represents the only nation capable of influencing the raw materials market in such a significant way, even through some simple choices regarding a single specific raw material.
In the case of graphite, the new limitations imposed by Beijing will undoubtedly have repercussions on the automotive and electric vehicle sectors since this material (along with other precious critical raw materials) is absolutely useful for the correct functioning of vehicles in the future. The choice appears significant above all due to the fact that Beijing is the main world supplier of this metal, as well as of a large number of other raw materials, which in the coming years will play a decisive role in the advancement of the global ecological transition. In order to give an idea of Chinese dominance in the raw materials market, it will be enough to cite some data from Wood Mackenzie: until last year, China controlled almost 80% of global mining production and more than half of refining, without mentioning the Beijing’s crucial role in the supply of synthetic graphite (obtained from oil and other carbon compounds), another indispensable material for enhancing the performance of batteries.
According to some estimates by BMO Capital Markets, each electric vehicle contains 50 to 100 kg of graphite, located specifically in the negative terminal of the batteries. This is double the amount of lithium present in the same vehicles, and it will therefore be very simple to understand the global importance of this raw material for the mobility of the future (and for the sustainable development of the entire planet). According to the International Energy Agency, graphite is even the most used material in electric cars, with a percentage of more than 30%. The use of lithium and cobalt does not exceed 10%, while copper (especially useful for cables) does not exceed 26%. One of the first effects of the new Chinese measures will be represented by a sudden concentration of purchases, at least until the rule officially comes into force, as well as obviously a temporary increase in prices.
