The electric vehicle story is only accelerating. Countries around the world are pushing for further adoption. Auto companies, like Tesla Inc. (NASDAQ:TSLA) are seeing substantial demand. Unfortunately, the industry is beginning to run into supply issues. For example, we already know we’re running short of lithium supply, which is good news for suppliers, such as Albemarle Corp. (NYSE:ALB).
Even silver, a critical material in the auto sector “is perennially in deficit with demand outstripping supply by millions of ounces,” says 401k Rollover. That’s good news for silver companies, such as Hecla Mining Company (NYSE:HL).
In addition, we’re running short of cobalt. In fact, “We simply may not have enough supply. Research from MIT suggests there's not enough ability to mine and process the material to meet demand,” reports Wired. That’s good news for companies such as Wheaton Precious Metals Corp. (NYSE:WPM).
At the same time, the industry is running short of graphite supply. By 2030, the world could see approx. 125 million EVs on the road, which means we’ll need a good deal of graphite, according to Mining News North. “This is because graphite serves as the anode in the lithium-ion batteries that power these EVs, not to mention the growing number of portable tools and electronics that use the same type of battery.”
The problem is so severe, the USGS includes graphite on its list of 35 minerals and metals considered critical to the United States.
That’s where a company like Ceylon Graphite (TSXV:CYL)(OTC:CYLYF) comes into play.
Ceylon Graphite just announced that it is ready to resume production at its K1 site, marking a return to normal operating levels pre-COVID 19 disruptions which interrupted mining activity twice in 2020/21. Ceylon Graphite is one of the few producing graphite companies in the world, outside of China and one of a very few with access to high grade vein graphite with average purity >90% Cg, a grade level which eliminates the need for an expensive primary upgrading plant commonly required for flake graphite found in most parts of the world.
The Company has completed the planned upgrades to the shaft at the K1 mine. These include the installation of new structural supports in the development drifts (tunnels) to 160 feet, a new compressor and improvement to the ventilation systems within the K1 mine. The mine is now capable of achieving 5,000 tons of production per annum.
“Production will scale over 2021 and beyond,” said Bharat Parashar, Chief Executive Officer and Board Chair of Ceylon Graphite. The company expects, and has previously announced, it will reach a sustainable run rate of 5,000 tons per mine, with K1 being the first to hit that target.”
The company also continues to develop its M1 and H1 mine sites, with both having already secured an exploration license. As previously announced the Company expects the M1 mine will achieve a full production license from the Geological Survey and Mines Bureau by Q3 of 2021. Drilling at the H1 site is in full swing with both drilling rigs in operation.
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