➡️ The Lac des Iles (LDI) mine in Quebec is turning 35 this year. What’s the plan for the future?

We have mined all over the east side of the mine. In 2023, we extended its life by eight years through a drilling campaign. Last year, we did another drilling campaign and we just got the results, so we will hopefully be publishing an additional resource. But there is a lot more graphite on the property. There is an adjacent property that belongs to another company, and we're collaborating with them to see if we can find more graphite on their property that we could process. Because the big advantage of LDI, being in production, is that we already have a tailing dam and the plant, and so it's much easier to put a new pit into production with existing infrastructure. If you try to start a new mine in Canada, it will take 10 years to get into production. In fact, our other project, Bissett Creek, is a greenfield mine, and we have now spent 10 years developing it. Now we are ready to get into production, with 1.2 million tonnes of resources identified, and the next step is to move into engineering and then construction. We have most of the permits already. We want to start with an output of 44,000 t/year, moving to 100,000 t/y.

➡️ Which project is the priority for Northern Graphite currently?

Right now, our goal is to expand the LDI mine. We think there's enough graphite there to maybe double the size of the production facility to 50,000 t a year. Our next step is in Namibia, where we have a brownfield project with 1.6 million t of graphite in the ground. There is already a processing plant 70 kilometres away, but we're relocating it closer to the mine site. It was an old mine that was producing fluorspar, and in 2016 we converted the processing plant to produce graphite to reduce the capex. We operated that brownfield for two years until 2018, then we put it in care and maintenance. Now we're busy picking up the plant and moving it to the mine site.

➡️ Was developing your property in Namibia not a priority at the time?

The big thing with graphite is that the market for non-battery applications is quite small. The global market is about 300,000 t/y. Until the battery industry started in 2014, you did not have big production lines, meaning that most of the existing mines are small because the volumes were not required. The battery industry, which is already quite big in China, is due to grow in North America and Europe too. Still, there are not that many battery factories that need graphite. But if you look at the future, the number of gigafactories that are being built outside of China is huge, and they will require about 2.5 million t of anode material by 2030. The whole play with graphite is how to transform the industry from relatively small volume mines into large production sites. The industry is in complete transformation. Even the first processing site in Namibia could only process 20,000 t because the market in Europe was 60,000 t. But now the market will be millions of tonnes, so once we move the facility to the mine site, we can expand its capacity to 150,000 t. 

➡️ Northern Graphite has historically been quite a big player. Do you expect to keep your position of leadership amid this transformation?

We were the largest outside of China and our ambition is to remain as such. If you add all our deposits – LDI, Okanjande, Bissett Creek – we will be able to produce 300,000 t/y. These three lines will feed a facility that we're planning to build in Baie-Comeau, Quebec, which will supply the US, Canada, and Europe. It will have a capacity of 200,000 t of anode material, because the yield from natural graphite is about 60%. Our office in Germany is designing this and working using the graphite to supply the battery anode, as an R&D lab. Okanjande will be in operation in 2026-27, Bissett Creek and Baie-Comeau in 2028. It’s a modular facility, with 20 modules of 10,000 t each. I think that's our strength as a company, that we can ramp up gradually to follow what's going to happen in the market.

➡️ What do you make of the current market fluctuations?

The market went from 2,000 t in 2014 to 1m t in 2024. Most of that was China, which accounts for 95% of battery production. The problem, and it's true for all the minerals, is that the Chinese have been ramping up capacity faster than demand, so prices are low because supply is higher than demand. The Chinese want to do that because they want to prevent other companies from entering the market. They want to keep their market share, which is 90% today. That's why it's very difficult for companies like ours to get into the industry, because the cost is very low. After all, they have overcapacity and aggressive pricing. Today, China is selling battery anode material for about $6,000/t. For us to make it economical, we need to sell the material for $8,000-10,000/t. So, a lot of companies cannot find investment. Now, Europe and North America are starting to push back on the low pricing. With the North American Graphite Alliance (NAGA), we filed a petition in the US to impose enough tariffs so that we can get to that level of pricing, and then we can attract investment into the country. Even with the current tariffs, Chinese graphite is still cheaper to import. There is also an association of producers in Europe we started engaging with.

➡️ How are you surviving in this industry?

All of our production goes to industrial markets; the US accounts for around 85% and the rest goes to Europe and Asia. We’ve never sold to a battery producer because we still haven’t built an anode plant. The German facility is producing material today, but it's a pilot, so that battery producers can test our product.

➡️ Many of your competitors have offtake agreements with battery or EV manufacturers. Why don’t you have any yet?

The thing about all of these companies is they're not in production, or they are in production, but they're having a lot of problems with their plants. These are very theoretical agreements, they will only become valid if they get into production. Our strategy is not to be in such a hurry to get an offtake agreement, but first ensure we can be in production. When our material is qualified, then we will make an agreement, and it will be much stronger than any of those. Our competitors sign these deals to raise investment, while our expansion projects are financed by a mix of revenue and existing investors. We have not raised money in the last three years, except for exploration.

➡️Tell me more about your project in Germany.

The company we bought in Germany was part of a big group called Heraeus which has spent 10 years developing a material called Porocarb, a synthetic porous material which is carbonised. They have developed that material as an additive in anode and cathode materials for lithium-ion batteries, mostly in Asia, and they built the lab in Germany and a small demonstration facility in Rotterdam. We wanted to buy them because they had the expertise that we needed to develop the anode material, and they had this interesting product called Porocarb, which was already commercialised in Asia, and they already had relationships with battery manufacturers. For us, it was a perfect fit: we have access to the customer, a commercial product in Asia, and a team that can develop materials and engineer the facility that we want to build in Quebec.

➡️ There are a lot of companies planning synthetic graphite. Do you think there is room for everybody?

Absolutely. Today, the consumption is about 50-50 between synthetic and natural graphite. The big difference is that natural graphite has a higher level of crystallinity, which the synthetic cannot quite match. This means natural graphite has more capacity to store the lithium in a battery than synthetic graphite, however it does not control swelling as much. Conversely, when you use synthetic graphite, your particle is more stable, but you have less capacity. That’s why every battery contains both; the designers choose how to mix them to optimise the cycle. 

When China scaled battery capacity from 2 gigawatt to 1 terawatt, it couldn't find enough graphite, so it built a lot of synthetic graphite capacity. But the problem with synthetic graphite is that you need a specific type of pet coke, so it’s dependent on that capacity. US refiner Phillips 66 makes the best coke for synthetic graphite production, and they're completely sold out. They don’t have any more capacity. 

➡️How is the increasing demand for new chemistries containing less graphite, such as sodium-ion, going to affect your operations?

We don’t expect a major impact because of the gigafactories under construction globally. By 2030, North America’s capacity pipeline is 1.3 terawatt-hours, Europe’s 1.2 TWh, and the rest of the world, excluding China, 0.3 TWh. All these factories will produce lithium-ion batteries. Graphite is going to be used for probably 20 years. The total market is going to be 2.5 TW and, with 200,000 t, we don’t even cover 10% of it.

➡️How are the tariffs implemented by US President Donald Trump affecting your operations?

Our products are subject to a 10% levy, but the burden is on our customers, not on us. They have to pay the duty if they want to import the graphite. So far, we've not seen a reduction in demand, because there's nobody else producing graphite in North America – if customers want to buy, they don’t have a choice. However, we don’t sell in the battery space, but only in the industrial market. Of course, it could affect our growth plans for the future if the tariffs continue. However, President Trump recently issued a new executive order for critical minerals. From my perspective, things will accelerate more than actually slow down. We also have relationships with Europe and Canada, there will be plenty of opportunity. We are not concerned. We are more concerned about the ability to get power, because with all these battery projects underway in Canada, there’s only a certain amount of power available, so we have to make sure we can get the government to commit the power that we need. When we make anode material in Baie-Comeau, we’ll require a lot of power – 100 megawatts for 50,000 t.

➡️Do you think the way forward for the industry is tariffs on Chinese imports?

For the US market, if the Chinese dump material 20-30% below what’s investment grade, the only way to protect ourselves is to ask for dumping protection. That's not a political decision, and so we're taking this legal route through NAGA, because if you want this industry to be nascent, you have to protect us. Otherwise, we will not be able to build the capacity.