The Electrification of Everything
Graphite One seeks to establish first US-based graphite supply chain
“Graphite is the essential material for what we call ‘the electrification of everything.’”
Vancouver-based Graphite One is out to make history by creating the first graphite supply chain in the country, the company says. To accomplish its mission, it’s working to mine graphite from Graphite Creek outside of Nome, site of the highest grade and largest known large flake graphite deposit in the United States. Even so, Graphite One doesn’t consider itself a “typical” mining company.
“Graphite One isn’t really a mining company,” explains President and CEO Anthony Huston. “We’re a tech company that mines graphite.”
The corporation, which Huston founded in 2012, considers mining a means to an end, an endeavor necessary to achieve its goal of creating a US-based graphite supply chain.
A US-based supply chain is vital for two reasons, Huston says. First, a homegrown source of graphite will decrease the country’s dependence on foreign sources for the mineral, which is critical in the automobile and energy industries. Second, it will allow the US to become a major player in the lithium-ion battery field, which is necessary to accomplish what Huston calls “the electrification of everything,” a key component in the push toward green technology.
And Graphite One is doing all of this from a boutique operation located on the north flank of the Kigluaik Mountains, thirty-seven miles north of Nome and three miles inland from the waters of Windy Cove on the Seward Peninsula.
Going after Graphite
A self-proclaimed tech guy, Huston began exploring the United States’ graphite problem after closely following the work of Elon Musk in the 2000s, particularly his work with Tesla. Huston knew lithium-ion batteries were integral to electric vehicles, a major driver of the green technology boom, and that graphite was one of the batteries’ primary components.
“There is typically between two and four times the amount of graphite in a lithium battery than there is lithium,” he explains.
Despite its continued push toward green technology, the United States is incapable of meeting its own demand for graphite or lithium batteries. Although it routinely makes the list of critical minerals, the US imports 100 percent of its graphite needs from China and other countries, according to Benchmark Mineral Intelligence, which analyzes markets and trends in the battery materials industry. To decrease foreign dependence, US Senator Lisa Murkowski introduced the bipartisan American Minerals Security Act in 2019, which seeks to rebuild the country’s domestic mineral supply chain and decrease foreign dependency.
To Huston, the country’s dependence on foreign supplies and its increased focus on electric vehicles and developing technology necessary to support them put it at a crossroads.
“If the United States is wanting to be a dominant player in the lithium-ion space, then they’re going to need to not rely on [other] countries,” he says. “That’s where we’ve come in and what we’ve been working on the past eight years.”
While researching potential sources of graphite, Huston learned that graphite was removed from the Kigluaik Mountains during the first and second World Wars and sent down to Seattle and San Francisco, where it was made into steel to help with war efforts. This research led him to the descendants of Nicholas and Evinda Tweet, a Minnesota couple who arrived in Nome during the early 20th Century Gold Rush and established N.B. Tweet & Sons to operate mines in Western Alaska.
The family agreed to let Huston extract and test graphite from their property: 176 state mining claims covering 23,680 acres, the same claims the Tweets acquired more than 100 years earlier. Testing demonstrated that the graphite could be used to make lithium-ion batteries. Graphite One purchased 163 of these claims and leased the remaining 13.
Graphite from the Graphite Creek project is extracted in a spherical shape. The mineral is then upgraded into a coated spherical graphite, which can be used to make lithium ion batteries.
More than Pencils
Ask the average person to name something made with graphite, and most would be hard-pressed to identify anything beyond the distinctive yellow pencils formerly favored by schoolchildren across the country.
“Most people don’t, to this day, understand what graphite is used for,” Huston says with a laugh. “My friend thought I was going to make golf clubs.”
But the mineral is important to many products, from everyday items like laptops, LEDs, smartphones, and household appliances to electric vehicles, solar cells, drones, energy storage devices, and even nuclear reactors.
“Graphite is the essential material for what we call ‘the electrification of everything,’” Huston explains. “Each of these and many more applications depend on graphite as a key means for the efficient transmission of power.”
The push toward green technology is driving the need for lithium-ion batteries, which in turn is increasing demand for graphite. The World Bank projects a 383 percent increase in graphite demand between now and 2050, fueled by the rapid increase of lithium-ion battery production, Huston says.
“It’s green technology that’s driving the demand, and the demand is coming from a combination of a couple of different things,” he says. “But right now, it’s electric vehicles. If the demand continues the way it’s going, by 2025 we’re not going to be in the position to produce the electric vehicles that that demand is going to call for.”
Further testing of Graphite Creek deposits identified both crystalline, large flake characteristics and naturally occurring morphologies consistent with already processed materials, Huston says, which means other potential applications exist for the graphite.
Purified graphite powders, for example, can be used to make anodes for alkaline batteries, while expanded or exfoliated flake graphite is used in flame retardant materials, Huston says. But for now, the company’s primary target is the electric vehicle and energy storage battery market.
“We’re well-positioned right now to use it with green technology,” he says. “We’re going after all green technology; that’s our focus.”
Path to Production
The Graphite Creek project is “a very boutique mine” when it comes to production, Huston says.
“We’re talking about moving a couple of millions of tons of ore a year to produce between 20,000 and 50,000 tons of graphite a year,” he says. “Many mines in Alaska move that in a month, so it’s a very small mining project, comparative to a lot of the other mines in Alaska.”
But the company has steadily worked toward full-fledged production, pouring $42 million into the project’s development, Huston says.
The 2017 Preliminary Economic Analysis estimates that the capital cost of the graphite mine, mineral processing plant, and all necessary infrastructure will total $233 million and create 269 jobs, Huston says.
Metallurgical testing gave Graphite One the ability to develop a proprietary method of upgrading the extracted graphite into a coated spherical graphite, or CSG, which allows it to be used in the anode side of the lithium batteries. The location of the processing plant, estimated to cost $130 million, has yet to be determined.
“Whether it’s in Alaska or another site, there are some aspects that need to be taken into consideration,” Huston says. “It all comes down to economics.”
Graphite One completed its pre-feasibility study (PFS) in 2019 and expects to release it in the second quarter of 2020. The study will include the results of the 2019 drilling program, which was completed in November, as well as its ongoing metallurgical and graphite product testing.
“Our PFS will project a mine life based on confirmed resources from drilling to date just on a very small part of our deposit,” Huston says. “We also expect that the mine’s life can be extended when it’s appropriate with additional drilling in the rest of the deposit. The potential for long-term employment in the region is very significant.”
Huston says once the PFS is released he expects to move directly into the feasibility study, which is targeted for completion at the end of 2021.
Graphite One currently holds the permits required to carry out its field programs for continued exploration drilling, PFS engineering fieldwork, and environmental baseline data collection, says COO Stan Foo. The process to obtain permits for construction and mining, as well as completion of an environmental impact statement, won’t begin until the feasibility study is completed and engineering and project descriptions are available, he adds.
Huston anticipates 2025 as the earliest the project could begin production. The timing dovetails nicely with industry forecasts.
“We believe this timing fits well with industry forecasts for flake graphite demand,” Huston explains. “Benchmark Minerals Intelligence expects that total demand for flake graphite in the battery market will exceed existing supply in 2022, and by 2028 will exceed the projected supply from existing and all potential new sources.”
And the project has the backing of the Alaska government.
In October, Governor Mike Dunleavy submitted a letter asking the federal government to designate the Graphite Creek Project a high-priority infrastructure project (HPIP). The HPIP program was created to expedite the approval of projects the Council on Environmental Quality determines are high priority.
“I can’t say much because we’re still waiting to hear about it, but it’s a huge thing,” Huston says of the potential designation and what it could mean for the Graphite Creek project.
“The Lower 48 wants a green economy and the electrification of everything, and Alaska can be the purveyor of that. Alaska can be the state that supplies the rest of the United States the ability to be a dominant player.”
Stewards of Alaska
Since Graphite One’s inception, Huston says he’s been mindful of ensuring that the company acts as a good steward of the environment and surrounding communities.
“That’s the way I was raised, and how I led my business my whole life,” he says. “Making sure we don’t come into an area, get what we need, and move on. We come into an area and make it better.”
Huston has visited the site several times and tries to make a trip up at least once a year. A subsistence committee comprised of about a dozen people from local villages meets several times a year, he says, to try to head off potential problems before they occur. COO Stan Foo has been instrumental in that process, he adds.
“We go through concerns, talk about where we’re at, the road ahead, and how we work together,” Huston explains. “We’re continually making sure that we’re aligning ourselves with [local communities] and being able to say, ‘Okay, tell us your concerns and let’s figure out how we come together as a whole.’”
Huston says he also views being a good neighbor as giving people opportunity. In this case, that opportunity comes in the form of good-paying jobs.
“Depending on where we’re drilling, there can be anywhere from ten to forty people working,” Huston says. “We’re always hiring locally; that’s very important to us, and we’ve done that since day one.”
He believes that Graphite One has positioned itself in the right place—and at the right time—to impact not just the villages surrounding the mine but Alaska as a whole.
“The Lower 48 wants a green economy and the electrification of everything, and Alaska can be the purveyor of that,” he says. “Alaska can be the state that supplies the rest of the United States the ability to be a dominant player.”