The mining newspaper for Alaska and Canada's North
The mining newspaper for Alaska and Canada's North
North of 60 Mining News – January 5, 2024
The exploration camp at Graphite Creek in western Alaska, home to one of the world's largest deposits of graphite.
Anthony Huston
During 2024, Graphite One will continue to upgrade and expand the Graphite Creek resource in preparation for a feasibility study to be finalized by year's end.
Graphite One Inc. Jan. 2 provided a recap of a landmark year in 2023 that positions the company to accelerate its plans to establish an all-American graphite materials supply chain that will include a mine at the company's Graphite Creek project in western Alaska and an advanced graphite processing and recycling plant in Washington or somewhere else in the "Lower 48" U.S. states.
"2023 was a year of major milestones for Graphite One," said President and CEO Anthony Huston.
These milestones are built upon a wider recognition that Graphite Creek hosts a world-class deposit of the graphite needed to break America's dependence on imports for graphite, a mineral critical to the transition to low-carbon emissions transportation and energy.
With annual electric vehicle sales in the U.S. expected to hit 4.7 million by 2030, which is nearly a fivefold increase over last year and nine times as many as were sold in 2021, American auto and battery makers are competing with international companies for reliable supplies of the graphite that serves as the primary anode material in lithium-ion batteries.
The U.S., however, has no domestic graphite mines, leaving the nation heavily reliant on imports from China, which currently produces more than 60% of the world's mined graphite and nearly 90% of the advanced anode material for lithium batteries.
China's October announcement that it plans to restrict exports of graphite added another level of urgency for developing domestic supplies of this critical battery ingredient.
For this reason, U.S. automakers and the federal government are becoming increasingly interested in the development of a mine at Graphite Creek, which the U.S. Geological Survey has deemed to host the largest known graphite deposit on American soil and "among the largest in the world."
"The new USGS report underscores our confidence that Graphite Creek is truly a generational strategic resource," said Huston. "It anchors our supply chain strategy – from our mine to our planned advanced materials manufacturing plant and our recycling facility – to build a 100% U.S.-based graphite supply chain."
Graphite One's strategy received a major boost with the July announcement that the U.S. Department of Defense awarded the company a US$37.5 million grant to complete a feasibility study for Graphite One's envisioned supply chain by the end of 2024, a full year ahead of the original schedule.
The Pentagon's decision to fund the studies acceleration follows a 2022 presidential determination by Biden that designated graphite as a Defense Production Act Title III material "essential to the national defense."
"This investment to increase domestic capabilities for graphite exemplifies [DoD's] Industrial Base Policy's commitment to building a resilient industrial base to meet current and future national defense requirements," said Department of Defense Assistant Secretary for Industrial Base Policy Laura Taylor-Kale. "The agreement with Graphite One (Alaska) is in furtherance of the Defense Department's strategy for minerals and materials related to large-capacity batteries."
The grant covers half the anticipated cost to complete a feasibility study for the graphite supply chain and requires that Graphite One fund the balance with raised funds.
The federal support for Graphite One, however, goes beyond the grant backing the company's endeavors to build a supply chain capable of helping to meet America's demand for the single largest ingredient in the lithium-ion batteries powering EVs and storing intermittent solar and wind energy.
In September, the Pentagon, through DOD's Defense Logistics Agency, awarded Graphite One a second $4.7 million grant to develop a graphite and graphene-based foam fire suppressant as an environmentally friendly alternative to polyfluoroalkyl substances (PFAS) fire suppressant materials, which DOD has been ordered to stop using by October.
"Graphite One is pleased to begin work on this Defense Logistics Agency project, which responds to the legally mandated requirement to develop a new alternative to long-standing foam fire suppressants which are known to have toxic impacts on human health and the environment," said Huston. "This DLA contract underscores the importance of graphite for innovative technology applications beyond the renewable energy markets – an important part of Graphite One's advanced graphite materials strategy."
The work on the graphite-based foam is being carried out by Vorbeck Materials Corp., an experienced defense contractor that specializes in developing advanced graphene and graphite applications.
Maybe even more important than the federal backing is the local support Graphite One has garnered for the mine it envisions for Graphite Creek and the American battery materials supply chain that it would support.
Shortly following the first DOD grant, Bering Straits Native Corp. (BSNC) invested $2 million into Graphite One and secured the option to invest an additional $8.4 million into the company endeavoring to develop a graphite mine in the Alaska Native Claims Settlement Act (ANCSA) regional corporation's western Alaska region.
"This is not just an investment in Graphite One, it is a long-term investment in our region," said Dan Graham, interim president and CEO of Bering Straits Native Corp. "We at BSNC have watched for years as Graphite One has worked to advance the Graphite Creek project and become a friendly neighbor in the region."
As part of the agreement, Graphite One and BSNC will partner on continued community development in the Bering Straits region of western Alaska, where Graphite Creek is located.
"Graphite One has told us of its intent to develop an environmentally responsible project and provide an exciting economic opportunity for the region that hopefully will play a crucial role in the nation's transition to a clean energy future," Graham added. "This is at the heart of our board's unanimous support of the project."
BSNC is not the only Alaska corporation throwing its support behind Graphite One. Taiga Mining Company Inc., an Alaska placer gold mining company that has been a longtime supporter and is the largest shareholder of Graphite One, loaned the graphite exploration and development company $5 million.
In exchange for the loan, Taiga was given the option to acquire up to a 1% net smelter production royalty interest for $5 million, in 0.25% increments for every $1.25 million advanced.
Taiga exercised its full option in December and now owns a 1% NSR royalty for 20 years after the first concentrate is produced at Graphite Creek.
With the sale of the NSR and the continued support from Taiga, Graphite One kicks off 2023 debt free.
Graphite One also enjoys the support of Alaska Gov. Mike Dunleavy and the 49th State's entire congressional delegation in Washington, DC.
During a July address on the Senate floor, Sen. Lisa Murkowski told Congress and the White House that Graphite One's envisioned graphite supply chain is something they need to support.
"Their project would be anchored by responsible mining of the Graphite Creek deposit producing tens of thousands of metric tons a year, but it would also extend to a battery anode manufacturing facility in Washington State which would be co-located with a battery recycling plant, which is why their CEO Anthony Huston often describes Graphite One as a technology company that mines graphite," she said during the address. "This, Mr. President, is a major opportunity for us."
With 2023 being a year of milestones that also included a 52-hole drill program to expand and upgrade the already world-class deposit at Graphite Creek, along with shipping samples of Alaska natural graphite and synthetic graphite to Pacific Northwest National Laboratory and EV end-users for testing, Graphite One is positioned for another banner year in 2024.
"We have incredible momentum and believe we are very well positioned to accelerate our path-to-production schedule," said Huston.
Graphite One is kicking off 2024 with work on its plans for an early-stage commercial facility to complete a finishing and coating line for synthetic graphite.
Subject to financing and permitting requirements, the company plans to have this initial phase of the graphite processing plant built by late 2025, with phase-one production of 25,000 metric tons of synthetic anode material by mid-2026 and production growth from then on as the battery market demands.
"Management currently anticipates construction and commissioning costs are estimated at US$430 million subject to any unforeseen delays or varied market conditions," Huston said, referring to the processing plant. "This is planned to be a direct path to revenue, even as we continue to develop our Graphite Creek natural graphite deposit."
The idea behind developing the processing plant first, which is reverse of most mining operations, is the company can begin supplying U.S. battery makers with synthetic graphite as it permits and builds the mine at Graphite Creek. This phased approach that would see natural Alaska graphite entering the supply chain toward the end of the decade fits well with the ramp-up of domestic EV manufacturing.
"With the U.S. currently not producing any natural and synthetic anode materials, Graphite One has formulated a fast-track path-to-production strategy jump-starting our battery anode material production," said Huston.
The exact location of the processing plant, which is currently anticipated for Washington, but there are indications it could be located somewhere else within the contiguous U.S. states, is expected to be announced before the end of March.
As Graphite One accelerates the development of a plant with the potential to offer a domestic supply of synthetic graphite for EV makers, the company will continue to advance Graphite Creek toward permitting and development.
For 2024, this work includes continued fieldwork at the western Alaska project, along with engineering and other studies to support the completion of a feasibility study that details the plans for a mine at Graphite Creek by the end of the year.
"Ultimately, Graphite Creek's natural graphite would supply our anode material facility alongside our synthetic production, to deliver a full range of natural and synthetic anode materials to EV customers, 100% manufactured in the United States," Huston explained.
Over his more than 16 years of covering mining and mineral exploration, Shane has become renowned for his ability to report on the sector in a way that is technically sound enough to inform industry insiders while being easy to understand by a wider audience.
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