Holy Grail

Tuesday dawned the same way every other day's dawned since January 20 and the same way every day between now and whenever he decides to leave office will dawn: With everyone talking about Donald Trump. The White House went ahead with new tariffs on China. Unlike Claudia Sheinbaum and Justin Trudeau, Xi Jinping didn't rush to get on the phone with Trump. They're still celebrating the Lunar New Year over there, and Xi's not the sort of guy who's going to fall all over himself to appease another w

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10 thoughts on “Holy Grail

  1. Tungsten, tellurium, bismuth, indium and molybdenum, my five favorite pizza toppings.

    Oxford Energy just dropped a new report on the graphite market. It’s wild how much leverage China has there. One half of lithium batteries (and the biggest part by weight) is the graphite anode. At less than 10% of the cost of a Li-ion battery, people don’t give graphite too much thought, but without it, no battery. When the Clean Vehicle Credit in the IRA stipulated part sourcing from domestic/friendly countries, EV makers lobbied (successfully) for a carve-out for the graphite in their batteries because there were no other sources. If China ever decides to go to the mattresses, cutting off graphite exports will be near the top of the list. They own the graphite market.

    From the Oxford Energy report, “With China hosting around 98% of the world’s graphitisation capacity, it is no exaggeration to say that without Chinese anode material, there is no Western battery industry[.]”

    Link: https://www.oxfordenergy.org/wpcms/wp-content/uploads/2025/02/Insight-164-Western-Battery-Graphite-Markets.pdf

    1. Graphite, like rare earths, is found and mined in many countries. Canada is a major source. China dominates the supply of refined graphite, like it does rare earths, partly because it dominates the refining and processing of natural graphite, and that is both because it is tolerant of the environmental damage and because it invested in the facilities to do it efficiently. And partly because China periodically increases its production and lowers its price to drive out competing producers in the West and elsewhere. I’ll call that “dumping” even though it may not meet the technical definition.

      The US and Australia have been supporting domestic rare earth mining and refining investment, but haven’t to my knowledge done anything to shield domestic industry from Chinese dumping.

      On graphite, I don’t know if the US is doing anything to develop its domestic graphite industry. I think the West may be more focused on developing a synthetic graphite industry, but that too will require action on Chinese dumping.

      1. ~70% of battery grade graphite is synthetic, the rest being mined. Of that, 76% is mined in China. The bulk of the remaining mining activity is in Africa, which exports effectively all of it to China for processing.

        I don’t think it would be too hard for RoW to spin up synthetic production, and it’s not that dirty. It’s very energy intensive, and produces a lot of CO2, but at least CO2 won’t poison your groundwater. It would just take a very long time to build the infrastructure.

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