EXCLUSIVE: 'New Era For Mining' As Nouveau Monde Takes On China In Graphite Supply Chain
Graphite is a mining underdog. It’s one of the least known of the critical materials that go into making batteries.
The market is currently controlled by China — unless Nouveau Monde Graphite (NYSE:NMG) and a handful of other Canadian companies can have a say.
Graphite is used in the negative electrode of a lithium-ion battery, Julie Paquet, VP communications and ESG strategy at Nouveau Monde Graphite told Melanie Schaffer at Benzinga.
“Everybody’s focused on minerals such as copper, nickel, lithium — the high-visibility metals, but the anode is made of 95% graphite, without which, you have no battery,” Paquet said.
Those batteries are in your phone, and your laptop, as well as in electric vehicles (EVs).
China’s Dominance In Graphite Supply
“China controls the supply chain,” Paquet said. “They mine 75% of world’s natural graphite and they control 95% of the spherical graphite market for the lithium-ion batteries.”
However, in October 2023, China announced it was restricting exports of graphite to protect national security, and that it would require permits for the export of many graphite products.
“With China becoming a problematic sourcing partner, it creates a huge opportunity for North American producers like Nouveau Monde,” said Paquet.
The company has two large deposits located in Quebec, it has processing and transportation infrastructure in place and hopes to be able to supply markets that are looking to disassociate from China. Canada, as a nation, is the world’s 10th-largest graphite producer.
“We’ve been engaged with battery and electric vehicle manufacturers for a number of years, thanks to our phase 1 facilities where we are producing graphite — and manufacturers are really interested in securing supply,” said Paquet.
Indeed, the company announced in February that Japanese electronics giant Panasonic Corp (OTC:PCRFY) and U.S. automotive group General Motors Company (NYSE:GM) had each invested $25 million in Nouveau Monde in a private placement deal.
Nouveau Monde will use the investment to support its phase 2 operations. Both Panasonic and GM are looking to secure graphite supply in North America. GM is looking to an all-EV future, while Panasonic is a major supplier of lithium-ion batteries.
“We’ve got a number of other customers waiting to reserve some volumes. So, there is a growing need for those manufacturers to find alternatives to China supply.
“We are ideally located in Quebec to develop a fully local and fully integrated supply chain,” Paquet added.
Environmental Concerns Addressed
The company is also delivering a product that helps address global environmental issues.
Paquet said: “We’re all about responsible mining, we’ve committed to being totally electric at the mining site.”
Caterpillar Inc (NYSE:CAT) is partnering with Nouveau Monde to build the world’s first all-electric open pit mine. It has also engaged with local communities and workforce.
“We’re trying to create value for all the stakeholders involved in mining this area so it can be really sustainable over the long-term,” Paquet added.
Can Investors Look Forward To A Successful 2024?
The company announced in January the successful closing of its acquisition of Mason Resources’ Lac Gueret Graphite Deposit. It expects to announce more strategic partnerships and investments in the coming months.
“I think the market is really going to crystallize this year in the batteries materials space and we’re seeing a lot of offtakes, and we’re moving in that direction,” said Paquet.
There’s a greater interest in visibility on battery materials, those critical minerals. It’s a new era for mining and it’s very exciting,
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Image via Midjourney