When many individuals consider graphite, the very first thing that involves thoughts is pencils. Whereas it is a key use of graphite, this commodity additionally performs a task in rising applied sciences. So it won’t be a nasty concept so as to add just a few graphite shares to your portfolio.

Graphite use is predicted to choose up within the coming years due to electrical automobiles (EVs). It’s utilized in lithium batteries and because the EV pattern continues, these graphite shares ought to climb greater. Let’s check out just a few of the perfect graphite investing alternatives…

Finest Graphite Shares to Purchase

In 2021, there was no pure graphite produced in america. Nevertheless, it imported greater than 53,000 tons.

Graphite demand has climbed due to EV batteries, however we use it in lots of different areas as properly. These embody brake linings, refractory purposes, steelmaking, lubricants and extra.

And simply as there are numerous makes use of for graphite, there are additionally many firms to think about. A number of the finest graphite shares embody:

Nouveau Monde Graphite (NYSE: NMG)
NextSource Supplies (OTC: NRCSF)
Syrah Sources (OTC: SYAAF)
Magnis Vitality Know-how (OTC: MNSEF)

Most of those firms commerce over-the-counter (OTC). And this comes with its personal set of dangers. Nevertheless, they’re internationally-based and in addition commerce on main international exchanges.

Nouveau Monde Graphite

First up on the record of the perfect graphite shares is the one one which trades on a significant US trade, Nouveau Monde Graphite. This Canadian firm was based in 2011. And it goals to “produce the best superior graphite supplies with a carbon impartial footprint for a sustainable world.”

Its major challenge is the Matawinie mine situated in Saint-Michel-des-Saints, Québec. It owns 100% of this challenge. In keeping with a feasibility examine, the mine has projected graphite focus manufacturing ranges of 52,000 tons per yr for almost 30 years. Nouveau Monde goals for this to be a completely electrical graphite mine.

To maintain up with the persevering with EV pattern, it’s additionally working in the direction of vertical integration. This could permit it to ship anode battery supplies on to the market. Its proposed plant to Bécancour shouldn’t be up and operating but, but when plans hold going forward this could possibly be a prime graphite inventory to observe.

NextSource Supplies

The subsequent graphite inventory to purchase is one other Canada-based firm, NextSource Supplies. It’s a provider of battery and know-how supplies. It’s additionally engaged on services to supply graphite used within the manufacturing of battery anodes for EVs.

However NextSource Supplies isn’t simply utilizing graphite in its manufacturing, it additionally mines and processes flake graphite. It owns two mines, the Inexperienced Big Vanadium Venture and the Molo Graphite Venture.

The Molo Graphite Venture is one the very best high quality and largest-known flake graphite deposits on this planet. It’s situated in Madagascar and is estimated to comprise greater than 140 million tons of graphite. In 2021, a examine started for an expanded Part 2 capability of not less than 150,000 tons per yr. If NextSource Supplies can ship at that stage, it ought to reward shareholders.

Syrah Sources  

Syrah Sources is an Australia-based firm. It operates the Balama mine in Mozambique. And this mine has a life expectancy of greater than 50 years. The corporate expects month-to-month output to be greater than 15,000 tons of graphite. Balama might turn out to be a significant provider as lockdowns in China are forcing individuals to look elsewhere for his or her provide.

It desires to be the primary main built-in producer of graphite for anode supplies that isn’t primarily based in China. As a substitute, it operates a manufacturing facility in Vidalia, Louisiana to supply lithium battery anodes.

This firm already has agreements with some main automobile producers. Syrah Sources has an settlement with Mitsubishi to assist improvement of battery supplies for its EVs. It additionally has a cope with Tesla to offer pure graphite lively anode materials. With two offers from outstanding automobile firms, Syrah Sources could possibly be a prime graphite inventory to purchase.

Magnis Vitality Know-how

The final graphite inventory on this record is Magnis Vitality Know-how, which is one other Australian firm. It owns 100% curiosity within the Nachu graphite challenge in Tanzania below its subsidiary, Uranex Tanzania.

It has a singular graphite processing technique that lets it’s extra environmentally accountable in addition to value aggressive. And it doesn’t depend on the Chinese language provide chain, which has been inconsistent with lockdowns.

One other of Magnis Vitality Know-how’s subsidiaries, Imperium3, has two lithium-ion battery crops. One is in New York, and it goals to scale as much as 38 GWh by 2030, which might make it the one non-China provide chain able to assembly world demand. The opposite is in Australia, and it’s nonetheless being developed. The corporate will present anode supplies for these batteries. If it’s in a position to scale up efficiently, it might turn out to be the most effective graphite firms.

Different Graphite Investing Alternatives to Contemplate

If you happen to don’t need to put money into only one firm, however nonetheless need publicity to the graphite business, the World X Disruptive Metals ETF (DMAT) is an effective possibility to think about. This focuses on firms producing uncooked supplies that go into disruptive applied sciences. This, in fact, contains lithium batteries and subsequently graphite.

DMAT has slightly below 50 holdings throughout all kinds of sectors and international locations. It at the moment holds round $3.8 million in internet property. And has an expense ratio of 0.59%. It is a nice possibility for many who need wider publicity to commodities, however nonetheless need publicity to graphite shares.

The Backside Line on Graphite Shares  

As EVs proceed to make use of lithium-ion batteries, graphite could possibly be a sizzling commodity. However these graphite shares are a wager on the longer term. So, as all the time, it’s vital to do your due diligence earlier than making any funding selections.