Chinese Export Controls on Natural Graphite Products

27 October 2023

Beowulf Mining Plc

("Beowulf" or the "Company")

Chinese Export Controls on Natural Graphite Products

Beowulf (AIM: BEM; Spotlight: BEO), is pleased to provide a comment on the Chinese government announcement dated 20 October 2023 with regards to the export controls on graphite products as from 1 December 2023.

Chinese Export Controls

On 20 October 2023, China announced its decision to impose export controls on natural graphite and synthetic graphite (including graphite anode materials). Graphite anodes are a key component in Lithium-Ion Batteries (“LIBs”) and many other battery technologies, and are widely regarded to be the material of choice in battery technologies for a foreseeable future. China is the world’s largest supplier of natural and synthetic graphite, currently providing more than 70 per cent of the graphite and refining more than 90 per cent of the graphite anodes used in LIBs.

According to Benchmark Minerals Intelligence (“Benchmark”) analysis, the Chinese policy could hinder non-Chinese anode production manufacturers who currently rely on feedstock material from China, and further push anode manufacturers outside of China to source raw-materials from elsewhere.

Grafintec

Grafintec Oy (“Grafintec”), Beowulf`s 100 per cent owned Finnish subsidiary, is currently establishing a facility for processing graphite, with the final product primarily tailored for anode manufacturing. This product is technically referred to as coated spherical graphite, which increases a battery’s competitiveness in terms of performance and cost.

The facility, located in the GigaVaasa area in Korsholm municipality, Finland, will begin processing non-Chinese imported material with the aim to process Grafintec’s own mined material in the future. The GigaVaasa area is an industrial zone focused on energy storage and battery technologies and therefore an ideal location for Grafintec’s graphite processing and anode manufacturing hub.

Raw-Materials Security

To ensure a secure and sustainable supply of natural and refined graphite, the EU’s Critical Raw Materials Act (“CRMA”) sets a target that by 2030, 40 per cent of all processed graphite used within the Union is produced by the Union, and that 10 per cent of the graphite used is extracted from within the EU. Grafintec’s strategy is aligned with both these targets, through the initial development of its processing facility at GigaVaasa, to subsequently extracting graphite from its own natural graphite projects of Aitolampi and Rääpysjärvi.

Aitolampi, which is 100 per cent owned by Grafintec, is a natural graphite deposit with a reported Indicated and Inferred Mineral Resource Estimate of 26.7 million tonnes at 4.8 per cent Total Graphitic Carbon (“TGC”) for 1,275,000 tonnes of contained graphite (reported in accordance with the 2012 JORC Code), and is one of Europe’s largest known flake graphite deposits. Furthermore, metallurgical test-work has confirmed that graphite from Aitolampi can produce high-grade concentrate in the range of 96 – 98 per cent TGC suitable as a pre-cursor for graphite anode materials production.

Grafintec also explores a number of early-stage graphite projects, including Rääpysjärvi, where a small quarry has historically been mined, and where Grafintec previously reported graphite contents from grab samples of more than 50 per cent TGC (limit of the analysing methodology). In November 2022, Grafintec excavated trenches at four different locations within one of the conductive zones, with all trenches revealing significant flake graphite mineralisation. With 12 conductive zones that remains untested, this could indicate potential for a larger tonnage of graphite mineralisation in the area. 

Ed Bowie, CEO of Beowulf, commented:

“While the impact of the export ban imposed by China remains unclear, it does highlight the vulnerability of Europe and the rest of the world to the control China has on graphite and other minerals critical for the green transition. Grafintec’s strategy is to provide a secure, independent, and sustainable source of graphite for use in anodes for LIBs, which is fully aligned with the EU’s Critical Raw Materials Act.”

Rasmus Blomqvist, Managing Director of Grafintec, commented:

“Having ownership of one of Europe’s largest natural flake graphite deposits and with our establishment of the graphite anode materials plant (“GAMP”) in the GigaVaasa area, we are well positioned to support the future supply chain requirements for graphite anode material in the bourgeoning LIB sector.”

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About Beowulf Mining plc

Beowulf Mining is a mining company with main activities in exploration and development in Sweden, Finland and Kosovo. Beowulf's portfolio is diversified by commodity, geography and stage of development of the projects and consists primarily of iron ore, graphite, gold and base metals. Beowulf Mining is headquartered in London, England.

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