In July 2023, the U.S. Department of Defense (DOD) announced that its Office of the Assistant Secretary of Defense for Industrial Base Policy had entered into a $37.5 million agreement with Graphite One (Alaska), Inc. under Title III of the Defense Production Act (DPA). The Technology Investment Agreement grant, sourced from the Inflation Reduction Act, will help the subsidiary of Graphite One Inc. to build a complete domestic supply chain of graphite materials for the production of large-capacity batteries used in electric vehicles, vehicles powered by hydrogen fuel cells, and energy storage.
The award would not have been possible without significant support from Alaska’s senators. Senator Lisa Murkowski (R) last year successfully encouraged former President Joe Biden to invoke the DPA to address the nation’s supply chain issues, noting, “The time is now to grow, support, and encourage investment in the domestic production of graphite, manganese, cobalt, lithium, nickel, and other critical minerals to ensure we support our national security, and to fulfill our need for lithium-ion batteries – both for consumers and for the Department of Defense.”
Senator Murkowski has visited the Graphite One site and last year spoke on the Senate floor about the project’s importance. She held up a piece of graphite from the site, noting “This graphite from Alaska would probably be the first piece of American graphite – of domestic graphite – that you’ve ever held in your life because there’s nothing domestic about the graphite that goes into our cell phones today. . . It’s not too late to realize the immense value that Graphite One holds for our economy and our security. This project will give us a significant domestic supply.”
Video Courtesy Senator Lisa Murkowski
After the recent award from the DOD, Senator Murkowski reflected, “The Graphite One project is in a league of its own, in terms of the scope of the resource in the ground in Alaska and the vision the company has for manufacturing anode materials and recycling batteries in Washington state. I congratulate the team at Graphite One, and I thank the Department of Defense for recognizing the immense value of this project. I look forward to the economic and security benefits it will provide in Alaska and across the nation.”
Additionally, Senator Dan Sullivan (R) led a letter to the DOD asking for funding for a feasibility study to enable the project to progress. He also voiced his support for the project to numerous senior officials in the prior administration, including Assistant Secretary of State for Energy Resources Geoffrey R. Pyatt. After the announcement of the award, Senator Sullivan said, “This project will also bring needed jobs and economic development to a rural area of Alaska, with opportunities for hundreds of local hires during construction and operation. I look forward to seeing the completion of the feasibility study for this project, and will continue to support the development of our critical mineral resources.”
Photo Courtesy Graphite One
Graphite One will use $75 million of the funding, with the DOD and the company each contributing half to conduct a feasibility study, which will be accelerated by an entire year. The study will help it expand and modernize its domestic production capacity and supply to churn out these graphite battery anodes. Under the DPA, graphite is considered “essential to the national defense,” but the U.S. imports all of the material that it uses, per a U.S. Geological Survey (USGS) report from 2021. In fact, according to the agency, graphite has not been produced in the U.S. since the 1950s. Imports of natural graphite have also been increasing over the past several years: by 48% in 2021 and by 55% in 2022.
According to multiple sources, including the Institute of Transportation Studies at UC Davis and the Institute for Energy Research, China produces over 60% of the world’s natural flake graphite, the source of the spherical graphite used in lithium-ion battery anodes. The closest competitor, Mozambique, was estimated at just 12%. The USGS indicated in 2022 that China was also the source of one-third of the American supply. The danger here was evidenced in 2023 when China introduced export restrictions through a flake and synthetic graphite permit process.
Demand will only continue to rise, though. In 2021, the International Energy Agency expected demand for graphite to be about 25 times higher in 2040 than in 2020. According to Benchmark Source, while 70 graphite mines were in operation as of 2022, 97 new ones would be needed by 2035. Given the global outlook, building out a domestic supply becomes all the more pressing.
Photo Courtesy Graphite One
Already, Graphite One is mining at its Graphite Creek Project, located on the Seward Peninsula in Alaska. According to a 2023 report, the deposit is the “largest known flake graphite resource in the U.S.A. and is among the largest in the world.” Graphite One currently projects that at full production, it will be able to mine 4 million tonnes of graphite mineralization annually at the site. About one-quarter of that would be the grade necessary to be sent to the nearby Mineral Processing Plant. The processing plant will turn this material into about 60,000 tonnes of graphite concentrate.
The company plans to process graphite at an advanced material and battery anode manufacturing plant, which will likely be built in the state of Washington with the assistance of Sunrise New Energy. Every year, it expects to churn out 41,850 tonnes of battery-grade, coated spherical graphite for electric vehicles and energy storage and about 13,500 tonnes of other advanced graphite material for industrial and technology supply chains. Graphite One also has forward-looking plans for a recycling facility at the same site to build a circular supply chain through which used materials can still be reclaimed.
Photo Courtesy Graphite One
In response to the announcement, Governor Mike Dunleavy said, “Thank you to the Department of Defense for recognizing the importance of Alaska’s vast mineral wealth, one example being Graphite One. Alaska is a resource powerhouse in a strategic position globally, with much more to offer than just our beautiful scenery and wildlife. Because of projects like Graphite One, we’ll continue to lead in producing natural resources like critical minerals and even oil and natural gas.”
Anthony Huston, founder and CEO of Graphite One, added, “The U.S. simply cannot maintain a 21st Century tech-driven economy without Critical Minerals like graphite.”
