The global supply chain for pencils has grown more intricate. China announced on Friday that it would impose stricter permits on the export of graphite, a pivotal mineral component of pencils and, more significantly, electric vehicle batteries. According to the US Geological Survey, China is responsible for two-thirds of the world’s natural graphite production.Thank you for reading this post, don't forget to subscribe!
This marks the latest development in the trade dispute between China and the United States, making the transition to a sustainable economy more expensive.
Graphite can be thought of as the less visually appealing sibling of diamond. Chemically, both consist solely of carbon and are formed under conditions of high pressure and temperature.
Although unimpressive-looking flaky black-brown graphite isn’t likely to appear in many marriage proposals, it plays a vital role in various types of manufacturing.
“From steelmaking to semiconductors to electric vehicle batteries,” explained Morgan Bazilian, a professor at the Colorado School of Mines.
He indicated that lithium-ion batteries almost always necessitate the existence of graphite, meaning electric vehicles cannot be produced without it.
China learned this lesson many decades ago and made significant investments in graphite mining and refining. “Their reserves may not be the largest in the world, but their production capacity certainly is,” noted Bazilian.
While Mozambique and Brazil do produce some graphite, their output falls far short of China’s.
Hughes Jacquemin is the CEO of Northern Graphite, and the company’s mine in Quebec, Canada is the sole major operational mine in North America.
He anticipated that increasing graphite prices would spur further investment. However, commencing a new mine and obtaining environmental clearance are time-consuming processes. “It will take 10 to 25 years to identify our deposits,” he estimated.
Graphite has now become the latest point of contention in the China-US trade dispute.
Mary Lovely at the Peterson Institute for International Economics suggested that China’s actions were partly retaliatory. Earlier this week, the Joe Biden administration imposed restrictions on computer chip exports to China.
“I believe it’s a demonstration of my power,” Lovely remarked. “If you mess with me, I can mess with you.”
Meanwhile, if you can afford a pencil, you can probably afford a pencil for an electric vehicle, albeit at a higher price.
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