Christoph Frey, Managing Director ProGraphite GmbH, Germany

WWW.PRO-GRAPHITE.COM

Battery Materials Europe 2019

The future of battery grade graphitePart 1

Christoph Frey, Managing Director

ProGraphite GmbH, Germany

26 - 27 September 2019, Amsterdam, Netherlands


Agenda

• Introduction of ProGraphite

• Natural graphite versus synthetic graphite: which is preferable for the battery industry?

• What is the market sentiment around graphite?

• How are environmental regulations expected to impact graphite production?

The future of battery grade graphite


www.pro-graphite.com 3

ProGraphite GmbH

➢ Dedicated team of graphite experts

➢ Decades of experience in various positions inside the industry including sales, production, lab, R&D, management

➢ Globally well connected inside the graphite industry with both, producers & consumers

➢ Own well equipped lab

Consulting Lab Services

Trade


Internet -Shop

@

Consulting

➢ Competent expert assistance in graphite projects from prospection to regular production

➢ Planning input for production lines e.g. flotation plants or spheronization plants for Li-Ion-batteries

➢ Independent evaluation / due diligence of graphite projects as well as of producing companies

➢ Providing help in understanding all aspects of the natural graphite business

➢ Market analysis and sales support for graphite and carbons

➢ In depth experience with graphite for Lithium-Ion-Batteries (LIB)

ProGraphite T +49 (0)8593 9383 188 [email protected] Dr.-Schindler-Str. 9

GmbH M +49 (0) 160 7586 976 Germany 94107 Untergriesbach www.pro-graphite.com

Business Activities ProGraphite

Industry expertise and experience provides the leading edge.

ProGraphite T +49 (0)8593 9383 188 [email protected] Dr.-Schindler-Str. 9

GmbH M +49 (0) 160 7586 976 Germany 94107 Untergriesbach www.pro-graphite.com

Business Activities ProGraphite

➢ Well equipped analytical section

➢ Pilot plant production facilities such as - impact mill - jet mill - spheronizer - air classifier

➢ Performance of in-house testwork such as - flotation - purification - preparation of expandable graphite- micronizing

➢ Preparation of spherical graphite - including physical, chemical and electrochemical analysis

Lab Services


Agenda

• Introduction of ProGraphite

• Natural graphite versus synthetic graphite: which is preferable for the battery industry?

• What is the market sentiment around graphite?

• How are environmental regulations expected to impact graphite production?

The future of battery grade graphite



Prognosed market demand for LIB until 2030

Battery cell demand for passenger cars and shared mobility vehicles, excluding buses etc.

Source: Roland Berger 2018

Additional capacity needed for buses, commercial vehicles, ESS, 3C etc. Production capacity needed by 2025 approx. 1000 GWh, in 2030 approx. 2000 GWh

Battery techniques of the next decade?

Lithium-Ion-Batteries or……Solid-state lithium battery?

Source: T. Placke et al. meet, 2015


Advantages• higher energy, increased safety, simplified BMS, smaller batteries

Problems• solid electrolyte need to be very conductive, easy to process and

durable -> combination of these attributes currently not available • highly reactive anode (Li-Metal) – dendrites and other problems • mass production very challenging

Duration until large scale production? "Up to a series production, certainly more than a decade." Prof. Martin Winter, meet Münster July 2019

Li-Metal

Li-MetalO

xide

Battery techniques of the next decade?

Lithium-Ion-Batteries or……Solid-state lithium: still many technical and safety problems unsolved & additionally high

production cost (2x LIB)

Lithium-sulphur: Limitations include material degradation, low cycle life and self-discharge.Lithium air: Limitations include material degradation due to air purity, short cycle life and

poor thermal operating range.Fuel cells: Will be further developed in parallel; main problems: infrastructure & price;

however market share will increase

Additionally other, (new) types of batteries.

• Disruptive new battery technologies (like solid state) need > 8 years until they can be used in automotive application

• Very high investment costs for battery plants

• Continuous improvement of LIB technology (performance and price)

Source: T. Placke et al. meet, 2015


c

Battery techniques of the future

Technological developments during the next years will lead to advanced LIB, with improvements like• higher Si-portion in the anode 2% … >10%, graphene doping etc. • advanced cathodes• pre-lithiation; advanced (ceramic) separators and safer electrolytes • …

LIB will be the prevailing battery technology at least for the next decade.

Source FMC AABC presentations 2018


?

David Deak (ex Tesla): “Lithium battery engineering is hard” “Progress is inevitable, but never as planned”

Graphite as anode material

Anode material for LIB and for advanced LIB will be mainly graphite!


Advantages of graphite as anode material

• Excellent cycle life • Low cost material • High safety and good availability• Good electrochemical properties

- High efficiency and cycle stability

- Good reversible capacity (theoretical 372 mAh/g), significantly higher than cathode

- Low potential vs. Li/Li+

• Good compatibility with other LIB components• Two types available: natural and synthetic

Data from ProGraphite, Dr. Anderman tbc, Dr. Galbiati SGL, electrek.co

Tesla September 2019: LiNi0.5Mn0.3Co0.2O2/graphite-> electric vehicle 1.6 million kilometers -> two decades in grid energy storage

Expected demand of graphite as anode material: 2025: 800,000 tons 2030: 1,500,000 tons

Natural graphite vs. synthetic graphite as anode material

Which type of graphite will prevail as anode precursor/material?

Natural or synthetic graphite? Both types of graphite have their advantages…

Current ratio approx. 40% natural graphite vs. 60% synthetic graphite used as anode for LIB. Often, synthetic and natural graphite are mixed together to get benefits from both.

Natural Graphite Synthetic Graphite

lower cost higher cycle life

higher capacity higher power

less Capex intensive less expansion

huge resources higher stability


Main advantage of natural graphite as anode material is the lower cost.

If possible, natural graphite will be used to reduce cost, one of the most important issues of LIB.


Mining FlotationDrying /

ScreeningMicroni-

zationSpheroni-

zationPurifi-cation

CoatingAnode Manuf.

Process flow for production of spherical natural graphite from the mine to the anode producer

Mine / Flotation Company

e.g. in Heilongjiang China

Processing Company

e.g. in Shandong ChinaCoating Company

e.g in Japan

Natural Graphite for LiB


Synthetic graphite for LIB

Main raw material is a product of the crude oil industry (PET coke)

Graphitization process one of the main energy and cost drivers. Up to 14 tons of CO2 /1 ton of graphite.

Production process takes weeks, high cost installations.

Low energy costs required.

Source Dr. Ivano Galbiati, SGL 2019

Demand prognosis: Graphite for LIB


Car industrynumber of cars produced in 2025 110.000.000pcs

thereof electrical cars (PEV) 11%

number of EVs produced in 2025 12.100.000pcs

average batt size 60kWh

Total battery capacity for EV 726GWh

other industries / applications

Total capacity for other applications 274GWh

Total battery capacity required 1000GWh

Graphite needed total (800 g per kWh in 2025) 800.000 tons

40%

320.000 tons

480.000 tonssynthetic graphite

percentage natural graphite

natural spherical graphite


Synthetic graphite- In 2017 price explosion for EAF electrodes due to shortages for various reasons - Afterwards: massive production increase mainly in China - Overcapacity -> price reductions

- Prices for synthetic graphite for LIB were relatively constant- Additional production needed for LIB until 2025 approx. 33% of current production of synth. Graphite- Environmental concerns: high energy consumption (CO2) for production of synthetic graphite


Sources: AOC CIMM GROUP; Dr. Ivano Galbiati SGL Carbon 09.2019

Price chart Graphite electrodes 4.2017 to 8.2019


Natural spherical graphiteYield at production of spherical graphite assumed with 50% Approx. 600,000 tons of flake graphite needed as feed material 300,000 tons of fine by-product to be absorbed by existing and new applications


Consumption of flake graphite 2018

established applications

SPG for Lithium-Ion-Battery

additional applications*

Consumption of flake graphite 2025

=> alternative new sources of spherical graphite from outside China welcomed

- Syrah Resources Mozambique??? - Consistent and suitable quality, low cost- Purification without usage of HF

+70%

690,000 tons 1,200,000 tons

Question: Where will the additional quantity come from?Currently all natural spherical graphite is produced in China

=> Most important factor: China and Chinese policy! - Raw material exports vs. focus on value add?- Environmental policy in China?

~55kgNatural flake

graphite per EV

MANUFACTURE OF BATTERY GRAPHITE – KWINANA, WA

Business DescriptionProduction of spherical graphite using a new eco-friendly process

(without usage of HF or other highly toxic chemicals) “EcoGraf Process”

Status/Achievements

✓ 2 years of Pilot testwork completed in Germany to produce commercial product

✓ Global patent pending over unique eco-friendly purification processing technology

✓ EcoGraf product fully tested and endorsed as meeting stringent operating

specifications

✓ Over 80 product samples distributed to battery anode manufacturers in South

Korea, Japan, China, North America and Germany

✓ Debt and equity financing discussions underway

✓ Offtake support underpins project financing

Production Scale Staged production facility at Kwinana to commence at 5,000tpa, quickly expanding to 20,000tpa

Manufacturing

Facility Economics

CAPITAL FINANCIAL RETURNS FOR 20,000TPA

5,000tpa 15,000tpa NPV10 EBITDA IRR Payback

Kwinana, WA US$22.8m US$49.2m US$141m US$35m 37.0% ~4yrs

battery graphite business summary

PLANT LAYOUT

Micronising and spheronising

Purification

Staged expansion from 5,000tpa to 20,000tpa - flexibility with modular design

15,000 TPA5,000 TPA + : TOTAL 20,000 TPA

CHEMICAL

PURIFICATION DEWATERING BAGGING

DRYING,

SCREENING.

MICRONISING SPHERONISATION HOMOGENISATION

R&D

OFFICE

www.kibaranresources.com


What is the market sentiment around graphite?

Graphite is not in the spotlight like Cobalt or Nickel. “… enough material available….”Short term = true Currently overcapacity for synthetic and natural graphite. However, enormous additional demand evolving! Graphite is battery material #1.

Natural graphite is a “critical raw material” in EU, Japan and the US, because of limited sources and critical countries. Synthetic graphite comes mainly from China as well.

High dependency on China / East Asia = SUPPLY RISK

Challenges with production of graphite in China due to ▪ Stricter environmental legislation and control▪ Domestic demand▪ Political reasons

Conclusion: New graphite sources are required.


Lithium-Ion-Batteries (LIB) technology with carbon anode and Lithium-metal-oxide cathode will be the battery technology for the next decade

Summary

Batteries

Anodes

Graphite

Graphite will keep it’s position as main anode material.

Both, synthetic and natural graphite have advantages in anodes for LIB.

ProGraphite expects that the ratio between natural and synthetic graphite is remaining at 40:60 in the long run.

Synthetic graphite needs to increase production by 33%.

Total flake graphite demand will increase by 70%.

Graphite needs to get more attention


Thank you for your attention!

Christoph Frey, Managing Director ProGraphite GmbH, Germany

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