Graphjet found the best geopolitical location in Nevada. Pow...

Graphjet found the optimal geopolitical location in Nevada.
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Export ban and the tension between China and the USA are the key to the expansion of the Malaysian graphite company.

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Danielle Miles
September 5, 2024
When the world's largest graphite producer, China, implemented strict restrictions on graphite exports in December 2023, Graphjet Technology saw an opportunity. It's time to accelerate plans to enter the US market.
This Malaysian company's patented technology converts biomass into synthetic graphite, which is a key component in electric vehicle batteries and semiconductors.
"The announcement in December did come as a surprise. We thought they might implement a ban, but it will have to wait until the end of this year or next year," said Aiden Lee, CEO of Graphjet, at the June Select USA Investment Summit, according to fDi. "But in terms of opportunities, this is actually advantageous for our company."

According to Statista, graphite is a missing link in the US electric vehicle battery supply chain, with over 40% of graphite demand depending on China. Despite government efforts to promote the development of critical mineral industries, the country has not yet mined graphite. Graphjet sees itself as part of the solution and announced plans in April to invest $0.2 billion to build a groundbreaking synthetic graphite factory in Nevada.

Palm oil to batteries

Established in 2019 and headquartered in Kuala Lumpur, the company utilizes palm kernel shells to produce synthetic graphite. Palm kernel shells are a byproduct of Malaysia's palm oil industry, the world's second-largest industry after Indonesia. Even in the domestic market, Graphjet is still in its early stages. The first factory in Pahang state is set to achieve industrial-scale production in the third quarter of 2024, producing 13,000 tons of graphite annually by 2026.

Graphjet's business reasons for investing in the United States are very substantial. At a time when the US government is cracking down on investors with ties to China, Mr. Lee claims that Graphjet has no affiliation with "any [entity] of the largest Asian economy." The company asserts that its synthetic graphite has a carbon footprint and cost about 80% lower than traditional underground mining graphite. Although graphite has thousands of applications, Graphjet's early focus is on electric vehicle batteries, where graphite accounts for over 90% of the anode.
Therefore, Graphjet announced on April 8 that its first US factory will be located in Nevada, a state where the electric vehicle value chain is growing steadily, based on Tesla's gigafactory, a $5 billion battery enterprise in partnership with Panasonic, and the large lithium mine at Thacker Pass.
The factory in Nevada planned by Graphjet will start operations in 2026, employing around 500 workers, producing 10,000 tons of graphite annually, enough to power 100,000 electric vehicles each year.
Raw materials pose a major challenge. Due to insufficient local biomass sources and trade restrictions by Malaysia on exporting unprocessed palm kernel shells to the US, Graphjet will carry out the initial production phase at its Pahang state factory, converting palm kernel shells into hard carbon before refining them in Nevada.

Mr. Li believes that by skipping this first step, Graphjet can take the lead in entering the US market, ahead of several other artificial graphite projects in the USA developed by New York's Anovion and Australia's Novonix. "We are assembling a US R&D team to research local raw material sources that we can use in the long term," Mr. Li added.