African graphite is entering global market

Asian Metal: Hello, Ms. Cui! Would you please make a further introduction to your company firstly?

Ms. Cui: The grade of raw ore in Madagascar is about 10%, and the proportion of large flake is high with more than 70% of medium flake graphite. With thick structure, large flake is especially suitable for acidizing graphite production. The surface of the raw ore is weathered, so it is easy to grind and extract carbon, and has little damage to the scale. In terms of fine graphite products, the proportion of flake graphite -325 mesh is relatively low, so they are favored by the refractory brick industry. At present, the production in the mining area is divided into two parts. The bulk density of raw ore in the No. 1 mining site is relatively high. For many years, medium graphite products have been the first choice for raw materials in the high-end refractory industry in Europe and America. They have relatively high tap density and low iron, sulfur, calcium and other trace elements. They have been highly recognized after being tried by several leading domestic anode material companies and are becoming a new favorite among lithium battery producers. Our actual production capacity is 12,000tpm now, and our annual production is expected to keep stable at 120,000t next year. Meanwhile, the raw materials of No.2 mining site are especially suitable for carbon industries such as refractories, crucibles, pencils, powder metallurgy and carbon brush machines. The output keeps stable at 5,000tpm now, and is expected to stay steady at 60,000tpy in 2021.

Asian Metal: The price of flake graphite continued to fall in the first three quarters of this year against the backdrop of the spread of Covid-19 worldwide. What are the changes in global consumption amid the pandemic? Does it affect your company's production and operation?

Ms. Cui: Global trade in minerals shrank this year as a result of the pandemic, but output and sales of Gallois rose instead of falling, as medium products of Gallois accounted for more than 70%, while the output of similar products in China continued to decline.

Asian Metal: Could you introduce your main target markets? If you want to enter the Chinese market, what areas do you want to enter? What are the advantages of your products over Chinese flake graphite?

Ms. Cui: The quality of Chinese flake graphite is uneven, and some suppliers mixed with fake and inferior products, which damages the overseas image of Chinese flake graphite. Due to the increasing fraudulent methods, it is difficult for users to identify. Thus, not only the medium flake graphite consumers, but the global fine product users also turn to the African and Brazilian markets. Syrah Resources' Balama Graphite Project in Mozambique is out of production now. Besides, graphite supply in Brazil is limited and mainly consumed by domestic users. Therefore, all the medium graphite products of Gallois have been ordered for the whole year. India and Turkey, as emerging markets, have seen soaring demand and supply shortage. Last year they imported nearly 40,000t from China. Flake graphite prices fell sharply in China this year. Apart from meeting the needs of some high-quality customers, Gallois focuses on Europe, America, India, Turkey, Japan and other markets.

Asian Metal: How about the African flake graphite market this year?

Ms. Cui: Africa's rich resources attract many investment, production and financial enterprises including those from China, but mining is constrained by tax, transportation, political and economic factors of each country. In terms of the quantity and price, if it cannot compete with the Chinese market, it is difficult to survive. After all, China is the world's largest producer of graphite. Abundant resources do not mean low cost. Thus, it is quite important to control production costs. The fact that Gallois can survive for 120 years is closely related to the relatively stable political environment in Madagascar, as well as the geographical location and resources of Gallois.

Asian Metal: Brazil and Turkey also have rich flake graphite resources, and the number of local flake graphite enterprises is growing. Will the global flake graphite industry pattern be changed in the future?

Ms. Cui: Brazil and Turkey have rich graphite reserves, but Brazil has not vigorously increased its production capacity for decades. Just like iron ore, Brazil has the world's highest quality iron ore and the largest export volume in the world, but it is not a major steel producer worldwide. Turkey has no large-scale graphite production enterprises so far.

Asian Metal: According to the current situation, when do you think the flake graphite market will improve, and how will the market go in the fourth quarter of this year or next year?

Ms. Cui: With relatively stable consumption of flake graphite in various areas, the increase in steel production has little effect on its demand. Sometimes the increase in demand is caused by policies, such as government's withdrawal of mining licenses. In 2010, it was not just the graphite industry which witnessed surging demand, but also other industries. Although lithium battery is the emerging demand in recent decades, it should also be noted that the continuous development and constant speculation of various new material batteries and the replacement of old growth drivers with new ones caused the price of spherical graphite to dip. The market is not facing weakening demand, but disorderly competition and overcapacity.

Asian Metal: Amid worldwide Covid-19 pandemic, economic downturn, exchange rate turmoil, and international political tensions, as a producing company oriented to the global market, how do you identify and deal with possible risks, and how do you find business opportunities in the crisis?

Ms. Cui: In this pandemic, many countries came to realize the importance of manufacturing and the impact of multiple channels of raw material supply on costs, as well as political factors. The production and export of China's graphite will be affected by the decrease in demand. As graphite is also abundant in the world, no country can have overwhelming advantages over others for a long time. Countries can survive in a sustainable and stable manner only through win-win cooperation, differentiation, and orderly development.

The country where Gallois is located is economically backward and lacks various means of production. All our equipment and materials are purchased overseas; the electricity used for production is diesel power generation, resulting in high cost of electricity. However, we take effective measures to control production costs, make careful assessment before entering into a new market, and win customers with superior products and high-quality service. Some companies stopped production and pulled money out this year. They may survive from the pandemic, but lost the market forever. Over the years, Gallois has always taken social responsibility and feedback as its mission. During this pandemic, we donated a large amount of anti-epidemic materials to local people. We are not only concerned about the physical and mental health of our employees, but also care about the local people, winning praise and support from local government. Our production has been uninterrupted.

Asian Metal: What are your expectations for the future development of your company?

Ms. Cui: As an enterprise with goals, ideals and responsibility, the first phase of the transformation of Gallois was completed. In the next five years, Gallois will steadily occupy the high-end market. We hope to become the best supplier with good quality and service reputation in the industry, and develop together with global partners.