China is tightening its grip on graphite exports. 

That’s bringing new urgency to Canada’s efforts to secure the critical metals needed to make EV batteries and fuel cells. 

Citing national-security concerns, China’s commerce ministry announced last month it would require permits for both natural and synthetic graphite exports, beginning Dec. 1. The move was viewed as a tit-for-tat response to the U.S.’s restriction on semiconductor exports just days earlier. 

The intensifying U.S.-China trade war has kicked off a familiar reckoning in Canada and other western nations. China produces about 65 per cent of the world’s natural graphite, pumping out 850,000 tonnes of the stuff last year. (Mozambique, the next largest, produced 170,000 tonnes.) While China’s control of lithium processing is well understood, its stranglehold on graphite is arguably stronger. The element is a key component in battery anodes. For every one million EVs manufactured, the industry needs roughly 75,000 tonnes of natural graphite.

Automakers—already facing looming graphite shortages amid rising EV demand—are now scrambling to find non-Chinese suppliers for the material in Mozambique, Brazil, India and elsewhere. 

Chris Burns, the CEO of Australian battery-technology company Novonix, said China’s coming export requirements illustrate how easily it could tax or deny graphite exports. Such moves could “cripple” the North American battery supply chain, he told The Logic in an interview. 

Burns, whose company spun out of a Dalhousie University research lab sponsored by Tesla, said he was hopeful that China’s export controls could “raise awareness” about the issue, potentially spurring more serious conversations in Canada about developing homegrown battery supply chains and diversifying away from China.

Some have already heeded the call. In a press release responding to the Chinese export screens, Northern Graphite, North America’s sole graphite producer, said it is “extremely well positioned” to supply domestic battery makers. It plans to expand an existing graphite mine in Quebec and build a new one in Ontario, while bringing a separate 200,000-tonne-per-year battery-material facility online in 2026. “We have everything in place,” it said.

Still, it’s unlikely Canadian miners will play a material role meeting those new supply demands anytime soon. Permitting requirements and environmental opposition have long hobbled major projects, including mines. The Canadian government helpfully points out that it can take anywhere between five and 25 years to build a mine in this country. The Paris-based International Energy Agency pegs it closer to 15. 

With time horizons that long, it’s possible the market for critical minerals will have shifted. Who knows, maybe hydrogen cars will be (back) in vogue.