In the Beginning, Raw Materials

May 18, 2003 – Vol.8 No.8

IN THE BEGINNING - RAW MATERIALS.

With any cutting edge technology, the spotlight is often focused on the companies and developers working to bring end products to the market.

Yet technologies such as fuel cells are made of parts and components that may or may not be produced by that end product developer. There’s little glamour in the parts and components business.

Still further down the chain of development, and in an even less glamourous position, are those providing raw materials needed to make the parts and components that, in turn, make the end product. The raw materials companies - the ones that dig stuff out of the ground and process it - are at the beginning of any cutting edge technology.

Consider graphite. In nature it is one of two forms of crystalline carbon. (The other being diamond.) It is the stuff of pencils, used in industry, electric devices, lubricants and is also a key material in fuel cells and batteries. It can be dug out of the ground or it can be made synthetically from coke and pitch. As of 2000 more than 600,000 tons of graphite were produced worldwide with China being the largest producer followed by India, Brazil, Mexico, and the Czech Republic.

Looking at future opportunities in the use of graphite in fuel cells and batteries, Crystal Graphite Corporation points out that a fuel cell used in an automobile would require 50 kilograms (110 lbs) of high purity graphite and that demand for graphite could reach 80,000 - 100,000 tons per year in 2-3 years. But that very rosy projection is based on data from a 3-year old study, the U.S. Geological Survey Minerals Yearbook - 2000. Since then the time frame for fuel cell introduction to the masses - which would require such large amounts of the material - has been lengthened to a decade or two.

Even though that time frame may be optimistic the demand for graphite should grow along with the demand for fuel cells and batteries. A more recent report by Principia Partners from October of last year claims that the market for fuel cells could reach $20 billion by 2010, with the demand for high purity graphite reaching $1.1 billion in that year. Visit Crystal Graphite at http://www.crystalgraphite.com/