【Graphite Anode】Two Australian Companies File Complaints Against Chinese Battery-Grade Graphite

Two Australian publicly listed companies are pushing U.S. trade regulators to investigate claims that cheap battery-grade graphite from China is flooding the U.S. market, threatening their ambitions to operate profitable graphite refining plants in the United States. 

Novonix and Syrah Resources have joined the U.S. Active Anode Materials Producers Association to file complaints with the U.S. Department of Commerce and the International Trade Commission. The organization urges regulators to impose a 920% tariff on imports of Chinese graphite to ensure fair competition. Graphitized petroleum coke (gpc) are widely used in the casting, metallurgy, and steel industries, with strong demand.

The Australian companies have filed complaints with U.S. regulators, claiming that cheap Chinese graphite is saturating the market, while graphite is a crucial component of batteries. Novonix stated in a release, "This document claims that China is depriving North American producers of a fair opportunity to enter the market by exporting artificially low-priced battery-grade graphite to the U.S., thereby harming the nascent domestic graphite industry."

Graphite is essential for the anodes of lithium-ion batteries. Both Novonix and Syrah plan to operate commercially scaled graphite processing plants in the U.S., supported by a total of $1 billion in loans from the U.S. Department of Energy and other agencies. The purpose of these loans is to promote investment in the U.S. and counter China's control over critical minerals, a key battleground in the trade war between the world's two largest economies.

Tightening Restrictions

Earlier this month, the Chinese government retaliated against the Biden administration's heightened restrictions on key technologies by limiting the export of certain minerals critical to U.S. "dual-use" technologies. While graphite exports have not been completely banned, the latest measures strengthen the restrictions initially implemented in 2023. China dominates the global graphite market, producing 77% of natural graphite and over 95% of synthetic graphite, refining nearly 100% of the world's graphite supply.

With the help of a $100 million loan from the U.S. Department of Energy, Novonix is establishing a synthetic graphite plant in Tennessee for the U.S. battery industry, aiming for commercial production by 2025. This week, the company received an additional $750 million loan from the Department of Energy to build a second plant nearby. Additionally, the company has secured $103 million in investment tax credits.

Syrah Resources, supported by the AustralianSuper pension fund, has built a plant in Louisiana, marking it as the first vertically integrated natural graphite supplier outside of China, processing material from Syrah's Balama operation in Mozambique. The plant is currently ramping up production to achieve commercial output.

Crisis Negotiations

However, last week, Syrah engaged in crisis negotiations with U.S. government agencies due to civil unrest near its Mozambique mining site, which led to production halts and triggered default clauses in important U.S. loans. The U.S. Department of Energy provided Syrah with a $102 million loan in 2022 to help build the graphite processing plant near Tesla and other customers in Louisiana, while the U.S. International Development Finance Corporation committed $150 million last month to support the Balama mining project.

Since 2017, Syrah has been unable to turn a profit from graphite extraction at its Balama facility in Mozambique, relying on Australian pension funds and U.S. government agencies to underwrite shares or lend money to sustain operations. Due to concerns over China's dominance in global graphite supply, the U.S. government has been willing to allow the money-losing Syrah to continue operating, as graphite is used in the anodes of modern batteries.

The U.S. Department of Commerce will begin its investigation in January, with a preliminary ruling expected in May and a final determination in January 2026.

Source: Australian Financial Review

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