Graphite Stocks Gaining Investor Interest In Tough Markets

Check out my recent quote in Mining Weekly's article on Graphite.

It would seem as if there is a new darling in the minerals market, as investor interest in graphite was seen rocketing over the past year.

From a total of about four listed companies making it their business to supply hungry markets with the carbon allotrope in 2011, the number of listed firms had increased to about 30, with most listings taking place since the beginning of the year.

Analyst Jeb Handwerger said that during the year, graphite had performed strongly, outpacing the generally depressed market.

“Graphite stocks have hit new highs and have recently pulled back, while gold and silver miners have hit two-year lows. This demonstrates excellent relative strength in an overall weak natural resource equity environment,” he said.

For example, AngloGold Ashanti, Africa’s biggest gold producer, fell 4.2% to R269.50 a share in April, the weakest in more than two years, while Gold Fields, the world’s fourth-biggest gold producer, dropped 5% to R100.73 a share during the same period. On Friday, silver miner Minera Atacocha, the Lima-based zinc and silver mining company, fell by 5.4%.

He expected global demand for graphite to increase exponentially from the current production of about 1.1-million tons over the next few years, possibly reaching 1.6-million tons in five years on the back of the rapid adoption of smart phones, laptops and hybrid-electric cars – all using lithium-ion batteries....

However, there are not many new serious development-phase projects coming on-stream soon, with the last significant graphite mine built 30 year ago.

“There are not many graphite mines outside of China. Large economic deposits are rare and right now most operating mines in North America are small. We could see the need for 30 to 40 new graphite mines over the next decade,” Handwerger said.

Read the full article at Mining Weekly by clicking here...

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