Insight Conversation: Shishir Poddar, Tirupati Graphite

Graphite has become more topical as battery demand, particularly from increasing appetite for electric vehicles, has brought possible battery raw material supply shortages to the forefront. Focus used to be mainly on cathode raw materials, but this has now shifted to the anode material as well. Tirupati Graphite CEO Shishir Poddar recently spoke with Jacqueline Holman, S&P Global Commodity Insights Metals News Lead, EMEA, about projected graphite demand and what needs to be done to ensure prevent a supply shortage.

Will be there be enough graphite by 2030 to feed the growing demand that we're seeing from the battery market?

I personally do feel that it is a challenge and there's a lot of efforts that need to be made, not only by producers, but in general, so that we do not come to a situation where this becomes a bottleneck.

Globally, we produce 1.3 million-4 million mt/year as of today. But most of that goes to applications other than energy storage (10%-15%). Now imagine by 2030, it is estimated that another about 4 million-5 million mt/year of graphite will be needed. Taken conservatively, it could be around 3.5 million mt/year, which would be three times the current global production of this material.

There is concentration of current production substantially in China. Some projects have started in Africa, including ours, but the fact is that the knowledge about graphite as a material in its production is limited and the learning is also long. I've been doing this for 31 years now, so it's a learning curve if you want to achieve success maintaining the quality it requires.

If we put in sufficient input, which includes developing of core expertise, core projects, deciphering more resources and developing them, in which all concerned parties would possibly need to play a role, it's not impossible that we meet our graphite needs in 2030. Based on the ecosystem that exists today, it is likely that we will not – as of today – but there is time enough to achieve the targets.

What would you say could be done to increase demand by 2030?

I think various bipartite arrangements should be looked at both by prospective producers and users. I also think that more mentor support needs to come from it.

The graphite power for the world could possibly be the African continent.

In Asia, the concentration is in China – China is already quite exploited because it has been meeting global graphite demand for quite a few decades now. Will China be able to grow to meet this demand? In my opinion, China doesn't have the ability to grow to the extent this demand is expected to grow.

Then we have the Americas – there is a couple of projects in Brazil, which has been producing graphite for a few decades now, and there are a few of projects in Canada, but Canadian projects have their challenges with sub-zero freezing zones. They'll have their cost and manufacturing challenges.

A lot of exploration for graphite has been done in Africa. Madagascar has been a historical producer and has been producing graphite for more than 100 years. There are some projects in Tanzania, but Tanzania does have some red boxes in terms of its regulatory framework. This is an area where governments must work with international bodies so that the regulatory component is improved and made more conducive to investment.

More or less, eastern Africa is an area that does have the potential to provide the world for its graphite needs.

You have two projects in Madagascar and are acquiring two in Mozambique. What are the upcoming milestone for these projects?

We are developing our projects in a different way from what you see generally... due to our understanding in the graphite space. We've taken a very staged approach to our projects, going step by step and synchronizing development with market growth.

Our two projects in Madagascar are both producing. We started with a very humble capacity of 3,000 mt/year to establish our ability and de-risk – the risks are related to developing a project in a third-world country – and now we are at 12,000 mt/year capacity, and we added a 9,000 mt/year plant.

We are currently constructing another 18,000 mt/year plant, so that will take us to 30,000 mt/year capacity in the second half of 2022. Following on, we plan to build three more modules of 18,000 mt/year each, so that will give us an additional 54,000 mt/year by 2024. So by 2024, our plan is to take our Madagascan projects to 84,000 mt/year capacity.

Can we build further? We haven't planned more as of now, but we have the ability to grow as the market grows.

Coming to the Mozambican projects, their large resources are already established – it's about 152 million mt of graphite in the ground, which amounts to close to 13 million mt of contained graphite. The two projects are fully permitted – one has a permit to produce 100,000 mt/year and the second has 50,000 mt/year. If we need to, we can get the permissions required for additional capacities, so we also plan to build these projects alongside the others.

We will be sharpening our exact timelines and exact plans after completing the acquisition.

Around about how much do you expect Tirupati to be producing by 2030?

My ballpark figure in mind is that we intend to be around 8% of the global consumption of graphite. If I keep that number I would expect us to be in the range of 400,000 mt-500,000/mt of graphite production by that time.

Having said that, we have a lot of other differentiators as compared to any other companies that are trying to develop graphite projects. We have the ability to build projects at capex, which is a fraction of what others do. We have proven ourselves to be possibly the lowest-cost graphite producer in the world with our own in-house technologies, and we manufacture our processing machinery in-house.

We have developed all these technologies over ages of working in the space, so if we see that the world is facing a huge bottleneck of graphite in its demand and supply situation, we can consider going even higher in our production to 2030. We can look at acquisition and mergers and try to develop organically and inorganically. We are able to process graphite in a shorter circuit and we are able to optimize each stage of the circuit.

The bottleneck has come due to very few parts of the world having ever produced graphite and development of its expertise has been limited primarily to China.

In India, we have some very consistent long-term players. My family has been in graphite since 1977, but for all new projects it seems they're just going to China to shop their EPC (engineering, procurement, construction). We work at a recovery of anywhere from 85%-92%. I'm not saying others can't do it, but the world will have to go through that learning curve and develop that understanding of how to do this. Ultimately companies who want to work in this space will have to get into it and try to find solutions so that they can work efficiently.

Tirupati also has the Patalganga processing project in India, what are your plans there?

The graphite that goes into batteries is very advanced processed graphite. Projects in developing countries do the primary processing of the ores and get flake graphite concentrate to about 95%-96% carbon purity. But for use in applications like batteries, you need spherical graphite, which you get by further processing it in multiple ways.

The next stage is to purify the concentrate to a level of up to 99.95% purity. That's not a simple process and you would not be able to generally efficiently execute that high-tech project in a developing country – you wouldn't have the inputs that you need, the skilled human resource and all that.

That's the reason we structured our plans like this – primary at the source and then downstream/specialty graphite at a more advanced jurisdiction.

Patalganga is being expanded, plus another larger scale specialty graphite project is upcoming, which we are building in the state of Odisha in eastern India. Our intent ultimately is that as we grow our production, we would possibly be setting shop for these high-tech processes closer to consumption areas. The further processing, which we are presently working on developing in India, would also in the future be developed in a European location for European battery manufacturers, in the US, and India would be serving our Asian markets.

That's our longer-term plan. By 2024 we finish what we call our medium-term development plan and we are now working on the longer term so 2030, 2035 and beyond. In that we may factor in these downstream projects in different locations.

This plan has evolved a bit more. The Pataganga is taken to a 4,800 mt/year capacity and additional 15,000 mt/year is upcoming in the Odisha project, so actually by late Q3 2022, we expect the 4,800 mt capacity to be up and running and possibly by end of 2022 or early 2023, we'll have additional 15,000 mt upcoming.