4 days ago
- Business
- AU Financial Review
Critical minerals shift from extraction to processing
With 25.3 million tonnes of contained graphite, it is expected to support a mine life of at least 70 years – meaning it could one day power not just electric vehicles, but the robot workers and storage networks of Australia's long-term clean energy future.
'Graphinex's Esmeralda Project is a clear example of Australia moving up the value chain,' says managing director Art Malone. 'Our demonstration facility in Townsville produces material that exceeds battery anode specifications, and we are scaling toward full commercial production.'
That kind of capability matters because graphite is not just another mineral. It makes up more than 90 per cent of the anode in lithium-ion batteries. As electric vehicle and storage demand grows, graphite has emerged as a strategic chokepoint – and China controls more than 98 per cent of its global refining capacity.
'Natural graphite is now officially classified as a critical mineral in all jurisdictions like the US, EU, Japan, and Australia,' Malone says. 'Yet over 98 per cent of anode material is currently processed in China. That creates a vulnerability in global supply chains and a massive opportunity for Australia to step in with secure, ESG-compliant alternatives.'
Geopolitical reality
According to Benchmark Mineral Intelligence's Enabling North American Graphite Growth report, China's dominance of graphite refining represents a fundamental strategic risk. In 2023, China supplied 72 per cent of the world's graphite and 92 per cent of the high-purity anode material used in lithium-ion batteries. By 2028, Benchmark projects China will still supply 65 per cent of global graphite and 86 per cent of anode material.
The report notes that 'barring concerted action,' China will continue to control the market. That dominance extends across both natural graphite – mined and refined and synthetic graphite, manufactured from petroleum feedstocks.
The report frames this not just as a trade or investment problem but a national security issue. 'Lithium-ion batteries are a critical component of many emerging advanced technologies, including many with national security applications,' it says. In that context, securing reliable, non-China graphite supply is not optional, it's strategic.
Australia's industrial policy is catching up to this geopolitical reality. With the federal Critical Minerals Strategy, Queensland's Critical Minerals Fund, and agencies like NAIF and the Office of the Co-ordinator General behind early-stage projects, the conditions for downstream investment have improved. 'Policy support has improved and needs to move fast and coordinated,' Malone says. 'This is something the Queensland government does well.'
The Townsville demonstration facility is a product of that convergence – a project that has secured institutional backing from Japan's Idemitsu and Indonesia's Baramulti, along with funding from government sources. The site produces qualification-scale batches of active anode material (AAM) for testing by tier-one battery manufacturers.
'We're seeing strong strategic interest from downstream battery and auto manufacturers, particularly in the US, South Korea, Japan, and Europe,' Malone says. 'Governments are now offering financial incentives and trade policy support for non-China supply chains. Our engagement with US, Japan and Australian government agencies reinforces the geopolitical importance of what we're building.'
High purity graphite
Demonstration facilities are often seen as proof-of-concept. But in this case, the technical data is already drawing attention. Independent testing shows the material has a discharge capacity of 381.4 mAh/g, compared to an industry standard of around 355, and purity levels of 99.99 per cent – placing it in the premium performance category.
The firm has already completed its pre-feasibility study and has now commenced a bankable feasibility study, along with permitting and financing discussions. Construction of its full-scale facility is expected to begin within 18 months.
'Financing will combine private capital, strategic investors, and government backed debt,' Malone says. 'Strong interest is already being shown by our global partners.'
The economic potential extends well beyond graphite. Australia's broader ambition is to become a trusted hub for critical mineral processing across the battery value chain – spanning not just graphite, but lithium, nickel, and rare earths. 'Australia has a once-in-a-generation opportunity to be more than a quarry,' Malone says. 'We can become a trusted midstream hub for critical battery materials.'
In that vision, projects like the Townsville facility are a test case – not just for commercial success, but for whether Australia can turn strategic ambition into industrial capability.
More than digging and shipping
Queensland Minister for Natural Resources and Mines Dale Last says the plant means that the nation is well positioned to not only meet the strong global demand for critical minerals but also add value to the supply chain through additional processing.
'Queensland's mineral deposits are world-class, and we're proud to be a mining state. We want to see projects that go further than the 'dig it and ship it' approach,' says Last.
He says the state government is investing in midstream capabilities to support critical mineral extraction and processing for our key critical mineral commodities including graphite, vanadium, and other materials.
'We've made it our mission to connect international investors with Queensland innovation, backed by the work of the resources cabinet committee to streamline approvals and get more projects off the ground,' says Last.
'We're pulling every lever to accelerate new developments, reduce approval timeframes and give industry the confidence to plan and invest.
Graphinex's battery anode production facility in Townsville and planned Esmeralda mine is proof that the government's strategy is working, delivering real opportunities for regional Queensland and positioning the state as a global leader in battery materials, he says.
If the race to electrification is also a race for industrial capability, then the work underway in northern Queensland may prove decisive. Not because it's flashy, but because it quietly answers the question: can Australia do more than dig? And this time, it's looking like the answer is yes for Graphinex.
