Epsilon presses go on US graphite anode plant
First investment into US supply chain by Indian firm in the wake of China export restriction storm
Indian minerals company Epsilon Advanced Materials (EAM) plans to build a $650mn graphite anode manufacturing facility in Brunswick County, NC, as the fallout from China’s announcement of restrictions to its graphite exports fuels calls to diversify the battery materials supply chain and reduce reliance on Chinese minerals.
With the move, EAM aims to produce anode materials which are eligible for subsidy under the Inflation Reduction Act (IRA). And it will mark the first time that an Indian company has invested in a battery supply chain project in the US, after several joint ventures involving East Asian battery metals and manufacturing firms.
According to thinktank the Center for International and Strategic Studies (CSIS), India supplies 9pc of the US’ graphite imports. But this particular project will not be reliant on Indian raw materials.
EAM says it is in talks with “local suppliers” for raw materials to be used at the North Carolina project, and the company spoke of its future ability “to provide graphite anodes to the growing EV battery industry faster, more reliably, and at a competitive cost without import challenges”.
EAM has the capability to manufacture anodes using both natural and synthetic graphite, although Brendan Jephcott of Hong Kong-based battery consultancy Golden Dragon Capital notes that “most anode material is produced from synthetic graphite and this trend is going to increase”.
Location, location, location
EAM managing director Vikram Handa notes the chosen site’s “favourable geographical location, business supportive policies and availability of a skilled talent pool”. And the firm stands to gain access to a large customer pool of EV makers, as well as a string of raw material suppliers from North American mining projects.
“Localising the battery manufacturing ecosystem will not only provide strategic advantages but also aligns with the broader goal of helping automakers leverage EV subsidies under the US IRA,” the firm says.
And it is likely that the company has already got firm customer interest for its products. “Synthetic graphite anode material companies would not invest millions without purchase orders from their lithium-ion battery customers,” says Jephcott.
Once Chinese graphite restrictions come into force in December, 33pc of the graphite the US currently imports will become subject to export firms gaining permits from the Chinese government. Jephcott, however, points out that the US may not necessarily see any material Chinese graphite imports.
“With respect of the news coming out of China last week, this is a permit [system introduction] and not a ban. In China, most anode material companies have not made a stock exchange announcement or initiated any coverage mentioning this, seeing this permit requirement as non-material,” Jephcott notes.