Southeast Africa’s graphite flake producers will continue to benefit from a market bifurcation that is pushing some consumers to supply security from ex-China sources in 2025, even as significant challenges remain from weak battery demand in the West and highly competitive synthetic graphite material.
Geopolitical tensions and subsequent export controls and tariffs have pushed Western countries into advocating for sourcing critical raw material outside of China. This is particularly the case for battery raw materials like graphite, whose global supply is currently overwhelmingly concentrated in China.
The importance of graphite in steel and EV battery production
Graphite is widely used in the steel industry globally and is the single biggest material component for lithium-ion batteries in electric vehicles (EVs) by weight.
China’s strength in the supply chain for graphite has been of concern for the US for several years, but the growth of the ex-China supply chain has been particularly catalyzed by concerns about trade barriers.
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The strategic role of Southeast African graphite producers
In December 2023, China introduced export controls on graphite and in September 2024, the Office of the US Trade Representative announced it would be introducing a 25% import tariff on imports of natural graphite from China beginning in 2026. The US also ended an exemption on tariffs for imports of synthetic and natural graphite active anode materials earlier in 2024.
Southeast African countries – considered non-aligned in the Sino-US trade and technology war, and with substantial natural graphite reserves – are particularly appealing as alternative sources of graphite.
In 2024, graphite concentrate capacity in Africa was 1,132,000 tonnes. In 2025, this figure is expected to increase by 117,000 tonnes, according to Fastmarkets analysts.
Madagascar, Mozambique and Tanzania all have major graphite reserves, according to the United States Geological Survey.
Syrah Resources, Madagraphite, Volt Resources, NextSource Meterials, Walkabout Resources and Tirupati Graphite all have resources in the region.
The potential for disruption due to heightened geopolitical tensions has caused an uptick in interest for graphite flake supply from African regions, according to producers in the region.
“We have seen a rise in inquiries for non-[Foreign Entity of Concern country] flake graphite, particularly from the US, accompanied by modest price increases,” the chief executive officer and president of NextSource, which produces graphite flake from its Molo Mine in Madagascar told Fastmarkets on December 20.
“Of particular concern is the availability of value-added flake graphite products, such as expanded graphite for foils and anode active material, as there are extremely few producers outside of China,” Hanré Rossouw added.
The disruption, the company believes, coupled with import tariffs on Chinese graphite, is expected to drive both price increases and higher demand for alternative sources.
But despite its appeal and the opportunities for the industry, there are a number of major hurdles for producers in the region.
Challenges for Africa’s graphite industry
Africa’s graphite mining sector faces some hurdles due to poor infrastructure, according to industry sources.
“Mines in Africa face considerable obstacles – [underdeveloped] local infrastructure has significantly limited the industry’s development,” one source said.
Acknowledging that infrastructure can be a challenge for projects in developing countries, NextSource’s Rossouw said the company has followed “a modular design approach to incrementally expand Molo.” This, they said, allows the company to manage infrastructure requirements more efficiently.
Indeed, infrastructure bottlenecks have already impacted some producers in the region.
In November, Walkabout Resources, which mines graphite in Tanzania, entered into voluntary administration. The move came after the company encountered financial difficulties resulting from congestion at the port of Dar es Salaam.
A relatively unstable political environment and civil unrest in many countries in the region is also a challenge.
In December, Syrah Resources, the world’s largest ex-China natural graphite producer, declared force majeure on its mine in Mozambique due to civil unrest related to contested election results in the country.
This raised questions about the reliability of supply from Africa as an alternative to China.
“The biggest problem with the current situation is the potential concerns on security of supply from Mozambique in the future in a time when the US and EU are trying to decouple from Chinese graphite supply chains,” Fastmarkets analyst Georgi Georgiev said.
“The region of Southeast Africa is crucial for natural graphite supply and political instability in the region puts under risk the entire concept of diversifying natural graphite supply chains,” he added.
Rossouw also emphasized the importance of local engagement and contributing to sustainable development.
“We have a very strong local team, and we are optimistic about the potential to play a significant role in the energy transition, particularly with our asset in Madagascar,” he said.
According to some market participants, infrastructure problems have also resulted in some disruption to the build-out of downstream/processing capacity in Africa.
This lack of infrastructure has resulted in restrained progress in the deep processing of natural graphite in Africa, according to some sources.
NextSource plans to build out a series of battery anode facilities, via an international partnership. This capability, Rossouw said, could offer it an advantage.
“China… dominates the value-added sector, supplying almost 100% of the midstream processing [spherical and purified graphite or “SPG”] to produce anode active material in lithium-ion batteries,” he said.
“As a result, the opportunity for companies, such as NextSource Materials, who are able to convert the graphite into the processed material used in battery manufacturing while guaranteeing OEM’s a secure supply is very significant,” he added.
The limited consumption of graphite flake fines outside of China is a challenge for graphite flake producers. Flake fines are used in the production of spherical graphite, which is used for anode materials.
China remains the preferred choice for South Korean and Japanese buyers due to its lower prices, sources in the Chinese market noted.
Partially due to to strong infrastructure, Chinese producers are able to produce graphite flake at lower prices compared with their international competitors, a second source added.
Furthermore, obtaining China’s export licenses for graphite to Japan and South Korea is faster than for other regions, with permits sometimes taking as little as two weeks, according to a graphite trader.
Ex-China producers have also been impacted by underwhelming demand for natural graphite in China. The country’s buildout of synthetic graphite capacity contends with demand for natural graphite, further worsened by underwhelming demand for EVs, restraining demand for graphite flake fines.
Opportunities for African large flakes in 2025
Despite these challenges, there is optimism for African large flakes in 2025, driven by steady demand in downstream refractory and expandable graphite sectors as well as a supply shortage in China.
“Large flakes are more sought after globally compared to fines,” a producer said, forecasting that the refractories and expandable graphite sectors, two major consumers of large flakes, are expected to be stable next year.
Additionally, China is facing tight supplies of large flakes, particularly +80 and +100 mesh, and this may not improve in the near term, sources said.
“We started purchasing African large flakes in the second half of 2024 due to the shortage,” a Chinese producer confirmed.
However, concerns about global economic downturns could temper the outlook.
“For example, Japan’s sluggish economic growth and an ageing population are contributing to the slowdowns in the country’s steelmaking sector, and further impact future large flake demand,” a trader warned.
