Tirupati Graphite PLC (LSE:TGR, OTCQX:TGRHF) said it expects prices to rise following China's introduction of export controls from the start of December in a move it says will safeguard its national interests.
Flake graphite is the largest constituent of lithium-ion batteries used in electric vehicles (EVs) and grid energy storage with supplies currently dominated by China.
By 2025, demand for graphite is expected to exceed supply and demand is expected to continue to outpace production growth until well into the next decade as the automotive industry ramps up EV production.
Tirupati said that this combination of increasing demand and supply shortfalls, alongside China's export restrictions, should start to push up prices which have fallen since the start of 2023.
The company currently produces natural flake graphite from Madagascar and is targeting around 8% of global supply by 2030 from its Madagascan project portfolio and a new development in Mozambique.
Madagascar and Mozambique are the largest producers of graphite outside China and represent 15% of current global flake graphite production.
Shishir Poddar, Tirupati’s executive chairman, said: "Our target is for Tirupati to become the leading producer and supplier of Natural Graphite, including for use in Li-ion batteries and the energy transition sectors outside of China.
“The global dependence for graphite on China, a key component of the EV revolution, is a cause of growing concern for international customers as supply becomes increasingly constrained.
"The implications of China's export restrictions are positive for Tirupati both in terms of the likely impact on prices and on the long-term demand for our product given our position as one of the few graphite producers outside of China.”