Is Graphite One Stock a Good Investment?

By Patricia Miller

Jun 28, 2024

Graphite One stock presents an opportunity to invest in a sector witnessing high demand growth. G1 aims to be a significant player in US graphite supply.

EV battery charging with clean renewable energy being generated by wind turbines.

Graphite One Inc (TSX-V: GPH) (OTCQX: GPHOF) is on a mission to become a significant player in the US graphite supply chain. Graphite is essential to many manufacturing, defense, and green transition technologies. Recognized as a Critical Mineral by the US Government, this sought-after mineral is experiencing a surge in market demand and Graphite One (G1) is seizing this opportunity. Curious if you should invest in Graphite One stock? Discover the strategic moves this growth-focused graphite company is making now.

About Graphite One (G1)

Graphite One Inc. (G1) (TSX-V: GPH) (OTCQX: GPHOF), aims to be a potential market leader in the US graphite space and is developing an all-American battery materials supply chain solution around this critical material. In Alaska, its Graphite Creek project boasts the largest natural flake graphite deposit in the US1.

This potentially lucrative property forms the basis of G1's goal of producing anode material for the lithium-ion electric vehicle battery market, energy storage systems and other graphite applications.

The global shift towards electric vehicles and renewable energy technologies is driving a surge in demand for graphite. So much so that graphite demand is projected to increase by 2,500% by 20402.

G1 is also laying the groundwork for an advanced graphite anode manufacturing plant in Ohio, to be accompanied by a battery materials recycling facility. Ultimately, the company has ambitious plans to become the first vertically integrated graphite producer to serve the US EV battery market.

What’s more, the powerful backing and investment of the United States Government validates G1's strategy. Graphite One has received two substantial Department of Defense grants amounting to $42.2M. This includes $37.5M for a feasibility study4 and $4.7M for developing a graphite-based foam fire suppressant5. 

In fact, G1 CEO Anthony Huston recently joined President Joe Biden at the White House2. During the meeting, the President discussed implementing tariffs on Chinese goods, investing in American manufacturing, and supporting union jobs to ensure fair trade practices and strengthen the US economy.

This event followed the President’s signing of an Executive Order for a 25% tariff on Chinese imports, including natural graphite.

Addressing President Biden, G1 CEO Anthony Huston stated:

"“Projects like Graphite One’s are important in so many ways – from job creation and the renewable energy transition to technology development and national security.”"
—

As Graphite One moves from development to full-scale production, it aims to reduce the US dependency on China for graphite and hopes to secure a robust and sustainable American graphite supply. This is in alignment with the goals of President Biden’s administration, which has emphasized the risks to national security and clean energy goals due to China’s control over critical minerals, including graphite.

Headed up by an exceptional management team, who are experts in mine construction, process design, and operations, G1 is committed to rigorous cost controls and efficiencies to maximize profitability and stakeholder value.

With so many positives, the team at Graphite One is excited about its future prospects.

Why Invest

Investing in Graphite One offers a compelling opportunity for those looking to tap into the booming graphite market. Here are six reasons why you might like to consider investing in Graphite One stock.

  1. Mission to Lead the US Graphite Supply Chain
    With three planned integrated operational pillars, G1 is on a mission to become a significant player in the US graphite supply chain as its future plans are to mine, process, manufacture, and recycle graphite anode materials. It is anticipated that this will primarily supply the US lithium-ion EV battery market and energy storage systems.

  2. Security of Supply
    The US is 100% reliant on imports of natural graphite, with around 70%6 coming from China. As the US intensifies efforts to challenge China's graphite market dominance, G1 is establishing the business and connections necessary to enhance supply chain security and economic competitiveness.

  3. Dedicated to Lasting Success
    G1 has assembled a team of individuals who are not just capable but are ready to drive business growth and deliver enduring value to stakeholders over the long term. G1’s management team excels in mine construction, process control design, and facility management. Their extensive expertise ensures efficient operations and a commitment to cost efficiency to maximize profitability.

  4. Surging Market Demand
    Rapid EV market growth is fueling a surging demand for graphite. The World Bank Group7 projects a 494% increase in the graphite market by 2050, while President Biden's 100-day report anticipates a 2,500% surge2 in graphite demand by 2040. G1's Graphite Creek is anticipated to meet escalating material needs while enabling the technology revolution in the green transition. Graphite One is planning to support technological advancements in sustainable energy.

  5. A Key Material for the Tech Revolution
    Graphite is a critical element in the making of lithium-ion batteries which power a wide range of modern technologies from smartphones to electric vehicles (EVs). It is also used in multiple military applications and as a foundation for graphene production.

  6. Government Funding Boosts Investor Confidence
    Government funding and investments by local and indigenous communities underscore investor confidence in Graphite One's strategy. Department of Defense (DoD) grants and Bering Strait Native Corporation’s investment validate company initiatives. Taiga Mining's investment further highlights trust in G1’s mining projects.

Graphite's Vital Role in Technology and Defense

Graphite is a key component in numerous high-tech and energy applications, particularly lithium-ion batteries. Its superior conductivity, thermal stability, and chemical resistance improve the efficiency and lifespan of batteries that power various devices and vehicles, from smartphones and laptops to electric vehicles (EVs) and energy storage systems.

go001-lp1-powering-technology-defense

EV sales are rising worldwide, with China taking the lead in 20233, igniting growing demand for graphite. Beyond energy storage, graphite is instrumental in the production of graphene. This material boasts exceptional strength, flexibility, and conductivity, making it highly useful in electronics, medical devices, and composite materials.

Graphite is also essential to the defense industry. Its ability to tolerate high temperatures, resist corrosion, and shield against electromagnetic detection gives it a high degree of worth in military applications. Graphite is used when constructing fighter aircraft, tanks, submarines, drones and more. With international tensions escalating, graphite demand from the military sector is also anticipated to rise.

Enabling the Tech Revolution with Vertical Integration

With the largest natural flake graphite deposit in the United States1, Graphite One is in a prime position to strengthen the country's clean energy and tech sectors with access to a stable supply of high-quality graphite.

The company plans to manage the entire production cycle, from graphite extraction at Graphite Creek to manufacturing battery anodes and recycling used materials in Ohio. This vertical integration will be designed to ensure high-quality production and reduce reliance on imports. G1 is also committed to upholding strict environmental standards.

Central to its business model, this approach meets the increasing demand for critical materials and promotes domestic sustainability and economic growth. Better still, G1 has notable backing from the DoD, strong political endorsement, and a significant investment from the Bering Straits Native Corporation (BSNC). This powerful backing validates G1's strategic initiatives and ambitious plans.

Investing in the Security of US Supply

The risk of mineral shortages is more pronounced than ever, driven by three main factors: foreign export controls, increased military demands due to geopolitical tensions, and potential disruptions in maritime transport routes. These risks underscore the importance of securing a stable domestic supply of critical minerals like graphite.

If China limits the amount of graphite it exports to the US or imposes tariffs on its exports to the US, this is an example of 'foreign export control'. Such controls could potentially limit the availability or raise the costs of essential materials, hampering the US's ability to secure sufficient supplies.

Over-reliance on foreign suppliers poses a strategic risk, especially when trade policies shift or diplomatic relations sour. That’s why Graphite One presents such an interesting business model. The company’s ambitious plans address these risks by aiming to build a domestic, self-sufficient supply chain that reduces dependence on foreign sources.

Geopolitical tensions and rivalry between major world powers increase the demand for minerals essential to defense and technology. Military applications often prioritize the use of these materials, potentially straining commercial availability. A robust domestic supply of graphite ensures that both defense and commercial needs can be met without compromise.

Maritime transport routes are vulnerable to disruptions, whether from natural disasters, piracy, or political conflicts. Such disruptions can halt the flow of critical minerals, causing supply chain bottlenecks and price volatility. Investing in US-based graphite production mitigates these risks by ensuring a steady and secure supply.

By focusing on domestic graphite production G1’s proposed supply chain should contribute to national security. Their strategic initiatives centre around building a company that can grow in lockstep with the growing demand for this crucial material in both defense and high-tech industries. G1's commercial strategy aims to build a resilient supply chain, safeguarding against future shortages and geopolitical uncertainties.

Explore Graphite One Stock's Potential

Graphite One plans to tap into the US graphite opportunity from multiple angles. It aims to become a key player in the technology revolution, strategically ensuring its long-term viability. 

To attain a competitive edge in the market, its triple-pronged integration strategy aims to position the company as a vital part of the future of graphite-based technology in the United States. 

In addition, its ownership of Graphite Creek, robust backing from the US Government and Graphite One's planned alignment with national priorities make this an intriguing company and one worth consideration and further research by investors interested in this space.

Discover More About This Exciting Company

Sources

  1. Springer. Insights into the metamorphic history and origin of flake graphite mineralization at the Graphite Creek graphite deposit, Seward Peninsula, Alaska, USA, February 27, 2023. https://link.springer.com/article/10.1007/s00126-023-01161-3

  2. Whitehouse.gov. Building Resilient Supply Chains, Revitalizing American Manufacturing, And Fostering Broad-Based Growth, June 2021. https://www.whitehouse.gov/wp-content/uploads/2021/06/100-day-supply-chain-review-report.pdf

  3. IEA. Global electric car stock 2013-2023, June 7, 2024. https://www.iea.org/data-and-statistics/charts/global-electric-car-stock-2013-2023

  4. Graphite One Inc. Graphite One awarded $37.5 million Department of Defense grant under the Defense Production Act. July 17, 2023. https://www.graphiteoneinc.com/graphite-one-awarded-37-5-million-department-of-defense-grant-under-the-defense-production-act/

  5. Graphite One Inc. Graphite One awarded US$4.7 million contract by U.S. Department of Defense's Defense Logistics Agency to develop graphite-based foam fire suppressant. September 11, 2023. https://www.graphiteoneinc.com/graphite-one-awarded-us4-7-million-contract-by-u-s-department-of-defenses-defense-logistics-agency-to-develop-graphite-based-foam-fire-suppressant

  6. S&P Global.BriefCASE: US facing challenges in its attempts to diversify its graphite supply chain. https://www.spglobal.com/mobility/en/research-analysis/us-graphite-supply-chain-expansion-dimming-import-needs.html]

  7. World Bank Group. Minerals for Climate Action: The Mineral Intensity of the Clean Energy Transition. https://pubdocs.worldbank.org/en/961711588875536384/Minerals-for-Climate-Action-The-Mineral-Intensity-of-the-Clean-Energy-Transition.pdf

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