The United States is accelerating efforts to exclude Chinese graphite, including restarting graphite mining for the first time in 70 years. Attention is on whether POSCO FUTURE M, the only company outside China capable of mass-producing graphite-based anode materials, could benefit.
On Jan. 2, according to the Associated Press and others, Titan Mining began building a pilot facility late last year to mine graphite in upstate New York, about 40 kilometers (km) from the Canadian border.
Titan Mining plans to mine 40,000 tons of graphite annually with a goal of commercial sales in 2028. That amount is roughly 50% of U.S. natural graphite demand. Rita Adiani, Titan Mining's chief executive officer (CEO), told the AP, "China cannot be seen as a reliable supply chain partner," adding, "We can supply a significant portion of U.S. demand."
Graphite is the most widely used mineral as the anode material in lithium-ion batteries for electric vehicles. According to the battery industry, each electric vehicle battery contains about 20–30% graphite, the highest share for a single mineral. By cost, it accounts for about 15% of a lithium-ion battery.
It is especially critical because there is no substitute. As lithium-ion battery demand increases, Bloomberg projects graphite demand in 2030 will rise to about 10.5 times the current level.
Most U.S. graphite mines closed in the 1950s. According to the U.S. Geological Survey's National Minerals Information Center, there are currently no mines in the United States that commercially produce graphite. But as resource security grows in importance, four graphite mines—two in Alabama and one each in Montana and Alaska—are preparing for extraction in addition to Titan Mining.
The U.S. government is also active. The Joe Biden administration in 2022 included a production tax credit for critical minerals in the Inflation Reduction Act (IRA). The Donald Trump administration also signed critical mineral agreements with countries other than China. Government funding is also being provided. The U.S. Export-Import Bank is reviewing a plan to lend up to $120 million to Titan Mining. Separately, it plans to provide $5.5 million solely for a graphite mining feasibility study.
U.S. graphite demand has been on the rise since 2020. According to the U.S. Geological Survey, U.S. graphite consumption increased from 30,000 tons in 2020 to 44,300 tons (2021) and 79,700 tons (2022), then edged down to 76,000 tons in 2023. However, because no graphite is produced in the United States, all of it is imported.
The United States, Korea and other countries rely on China for most of their graphite. While graphite deposits are found worldwide—including in China, Türkiye, Madagascar and Mozambique—most mined graphite is processed in China, resulting in high dependence on China.
Of all graphite produced worldwide, 99% of natural graphite and 96% of synthetic graphite are processed in China. According to the Korea Trade-Investment Promotion Agency (KOTRA), as of 2023, Korea imported 97.2% of its natural graphite and 95.3% of its synthetic graphite from China.
In the energy industry, there is growing expectation that the resumption of U.S. graphite production could create new opportunities for POSCO FUTURE M. That is because the United States is actively excluding Chinese graphite.
With the Trump administration implementing the foreign entity of concern (FEOC) requirements, battery manufacturers in the United States must achieve supply chain independence from Chinese corporations that fall under FEOC. If minerals deemed critical from entities in countries designated as foreign entities of concern are used in electric vehicle batteries, they are ineligible for subsidies under the Inflation Reduction Act (IRA).
For graphite, the FEOC requirement has been deferred until 2026. Until then, POSCO FUTURE M must focus on expanding its graphite supply chain beyond China. POSCO FUTURE M signed a natural graphite supply contract in 2024 with Syrah Resources, an Australian company that owns and operates a mine in Mozambique.
POSCO International, an affiliate of POSCO FUTURE M, secured long-term natural graphite supply rights through an equity investment in the Mahenge mine in Tanzania, Africa, with Australia-based mining company Black Rock Mining. If U.S.-produced graphite is also utilized, the likelihood of strengthening its foothold in the U.S. market increases.
A POSCO FUTURE M official said, "It is expected to take considerable time before the United States fully embarks on graphite mining," while adding, "The United States' move toward graphite self-sufficiency is a positive signal in the long term."