- All prices and movements are correct as of Midday AEDT on October 24
Graphite stocks in Australia are having a bumper week on the back of fresh geopolitical concerns.
Separate from the situation in Ukraine and the Middle East, the US-China trade war has flared again.
Late last week, China announced it was curbing its global exports of graphite.
Why did China curb exports?
This was in response to the US banning China from accessing more types of Nvidia chips.
The two countries are exchanging blows over critical goods.
Microchips are the backbone of modern manufacturing, while graphite is a key battery material.
Exchanging strategic blows
The US is concerned China may use American chip tech to better its military hardware.
China, in turn, has decided to make it harder for the US – and the world – to get its hands on Chinese graphite.
China is the world’s largest producer and downstream processor of graphite ore.
In response to the moves, ASX graphite stocks have soared on the news across the board.
Terminology refresher
One common theme among the companies listed in today’s article is that they are all seeking to produce anode.
Simply put, anodes in lithium-ion batteries are typically composed of graphite in the form of a foil.
Not all graphite is equal, and producing battery-ready graphite can be renownedly difficult – but well worth market premiums.
Here are five stocks to watch this week:
Syrah Resources (SYR)
- Syrah (ASX:SYR) was up 18 per cent to 88.5 cents at lunchtime today
- The company has a market cap of $598.1 million and one-year returns sit down 63.58 per cent
- Six brokers rate the stock a “buy” while two rate it a “hold”
Graphite producer Syrah Resources has its flagship project in the East African nation of Mozambique.
Called the Balama graphite operation, Syrah’s play is adjoined by a US-based downstream anode material facility.
The presence of an anode facility confirms Syrah’s plans: the enter the EV battery market.
The company most recently reported its Q3 CY23 report on October 17.
That quarterly revealed the company’s expectations natural graphite and anode material demand will grow fourfold and sixfold respectively into 2032.
The company finished the quarter with $80.8 million in cash as of September 30 2023.
Talga Group (TLG)
- Talga (ASX:TLG) was up 8.76 per cent to $1.18 at lunchtime
- The company has a market cap of $414.8 million and one-year returns are down 4.17 per cent
- Six brokers rate the stock a “buy” while one rates it a “hold”
Talga Group is another company focused on producing graphite anode for the battery market.
Talga’s flagship mine is the Vittangi project in north Sweden, with an EU anode facility in Swedish Luleå.
Talga recently saw Sweden’s environmental court reject appeals against its Vittangi approval, and, greenlight the anode plant.
Talga has most recently discovered a new graphite zone at Vittangi and plans to boost its plans for battery material output.
In its full-year accounts published in September, Talga held $38.2 million in cash at 30 June 2023.
Triton Minerals (TON)
- Triton (TON) was up 7.14 per cent to 3 cents at lunchtime
- The company has a market cap of $46.8 million and one-year returns sit up at 20 per cent
- No brokers cover the microcap
Triton Minerals is another East African-based graphite explorer, like Syrah, located in Mozambique.
Established in the Cabo Delgado region, Triton’s Ancuabe project boasts a 46 million tonne ore resource at 6.6 per cent graphitic content.
A Definitive Feasibility Study (DFS) for the project was completed in 2017.
The company most recently announced its agreement with a Mozambican project manager to accelerate mine development.
In its half-yearly report published September, Triton held $6.15 million in cash on 30 June 2023.
Ecograf (EGR)
- EcoGraf (EGR) was up 10.7 per cent to 15.5 cents at lunchtime
- The company has a market cap of $72.4 million and one-year returns sit down at 57.33 per cent
- No brokers cover the microcap
EcoGraf is also located in East Africa, in the Western-friendly nation of Tanzania.
The company – also eyeing anode production – boasts the Epanko graphite project as its flagship asset.
EcoGraf is seeking the holy grail of modern alchemy – 99.95 per cent pure spherical graphite.
For graphite to be turned into an anode, it must be not only extremely pure but extremely small. Think on a scale of 10 microns – something that’s hard to imagine.
In its annual report published September, the company held $38.6 million in cash at 30 June 2023.
Oar Resources (OAR)
- Oar (ASX:OAR) was up 28.57 per cent to 0.5 cents at lunchtime
- The company is the smallest on this list with a market cap of $11.7 million; one-year returns are down 10 per cent
- No brokers cover the microcap
Oar Resources is the smallest microcap on this list; and the only with a flagship project onshore Australia.
Oar’s keystone graphite play is the Oar Graphite Project on the Eyre Peninsula in South Australia.
Northwest of Coffin Bay, Oar boasts six licences at 1520 square kilometres overlying the Gawler Craton – the state’s oldest geologic province.
While the project is still in early stages, it’s worth noting Canberra has listed the development a critical minerals project.
The company held $1.218 million in cash on June 30 2023.