Graphite drawing an exploration crowd (November 14, 1988)

Yet another Canadian mining company has entered the search for graphite.

Quebec-based junior Mazarin Inc. (TSE) plans to spend almost $1.1 million between now and next May exploring for graphite, as well as the industrial minerals kyanite and dolomite, in the Fermont, Que., area, north of Sept Isles.

“I think they’re excellent properties,” said an excited Mazarin President Regis Labeaume of the area’s deposits. Of the budgeted expenditures, Mazarin will contribute $650,000 through a new financing, while an industrial commission managed by Fermont, known as Le Fonds d’exploration miniere du Nouveau Quebec Inc., is kicking in $30,000.

The remaining $400,000 is coming from the province of Quebec, marking the first time, Labeaume said, the province has provided a junior mining company (as opposed to a major) with an exploration grant. Market potential

How big is the market for natural graphite?

While a few companies in Canada have been actively exploring for the mineral — Stratmin Inc. (ME) is gearing up for production in Quebec, while Cal Graphite (VSE) and Stewart Lake Resources (TSE) have been busy in Ontario — the general consensus seems to be that whoever gets to production first will be in an excellent position to satisfy a large part of current demand. But, the market does seem to be growing.

Most of the world demand for graphite is being met by a synthetic product made from petroleum coke and other petrochemical byproducts. Synthetic graphite, however, is expensive to manufacture and is usually applied only where high purity and an extremely high carbon content are required.

Annual world production of natural graphite is about 600,000 tonnes, according to several sources. Groupe Conseil Roche Ltd., in a study conducted for Mazarin, reports there are 15 producer nations of natural graphite, with seven of those countries supplying more than 80% of the market. The main producers are China, Brazil, Norway, Madagascar, West Germany, Mexico and Sri Lanka.

Principal users of natural graphite are industrialized nations which account for 200,000-220,000 tonnes annually. A list of the mineral’s applications includes in batteries, brake linings, foundries, lubricants, pencils, refractories, rubber and steelmaking. Three graphite forms

Natural graphite is found in three forms: amorphous, vein and flake. Amorphous particles are described as being soft and irregular in shape, while vein graphite is lumpy with particles varying in size from minuscule on up to coarse flakes or chips. The flake variety has a flat plate or flaky appearance.

Of the different forms, the flake variety appears to be growing in popularity. “The evolution of the market for natural graphite, over the last 10 years, has translated into reduced exports for recognized microcystalline graphite producers,” writes Roche. “Inversely, Brazil and China experie nced sizeable shipment increases, principally of the flake category.”

(A report by Stewart Lake Resources points out that flake graphite carries a higher price because it is a more versatile form, from an industrial point of view.)

Major buyers of graphite include the Japanese, Americans and Europeans, and Roche makes the case that China and Brazil have been able to strengthen their market positions in flake graphite in these areas because of perceived supply insecurity elsewhere. “Coarse flake graphite is considered a strategic material in several countries,” writes Roche.

Pricing graphite is not an easy task (there is a diversity of specifications plus the expected producer secrecy), but Roche writes that actual prices for coarse graphite flakes range between $500(US) and $1,000 per ton, with the more pure product ranging between $1,200 and $3,500.

(The U.S. Bureau of Mines reports that for 1987, graphite prices, as measured by the price of imports, averaged $712 per ton of crystalline flake graphite, compared with $648 the year before. Mexican amorphous graphite sold for $52, up from $49 in 1986.) Steelmaking application

A spokesman for steelmaker Dofasco Inc. of Hamilton, Ont., confirmed the longtime use of graphite in that type of business as an additive to adjust the carbon level of steel. New technology has seen graphite applied in a different way, however. Because of the mineral’s ability to withstand expansion and contraction under varying degrees of heat, it is being used to make equipment used in steel making.

“Many components, sensors, have a graphite composition to give durability to those parts and devices under extreme conditions,” William Gair, manager of communications and media relations, said.

Until this year, Canada counted one graphite producer, Asbury Graphite Mills of New Jersey, which operates a mill during the summer months at Notre-Dame- du-Laus, Que. Stratmin recently reported (N.M., Nov 7/88) it has entered into a 15-year agreement with Asbury for the right to lease and operate the mill.

Stratmin plans to mine its own flake graphite deposit located 45 km north of the Asbury mill; it also plans to build its own 500-tonne- per day mill on that property. A 10,000-tonne bulk sample test is being undertaken by the company this month. Reserves (all classes) at the property are estimated to be 23.7 million tonnes, with an average graphitic carbon content of between 7.2% and 8.12%.

In addition to drawing up an agreement with Asbury for the sale of its concentrates, Stratmin says it is negotiating a sales agreement with C. Itoh Ceramics Corp of Japan.

In Ontario, Cal Graphite has been active north of Huntsville shoring up reserves; a low-cost, open-pit mining operation of crystalline flake graphite is envisaged. In the eastern part of the province, north of Kingston, Stewart Lake has high expectations for its Kirkham property, where the company says tests indicate a high grade deposit with a mix of coarse, fine and medium-size flake. Iron deposits

The Quebec North Shore and New Quebec region is known for its iron deposits, and towns in that part of the province have come into existence depending solely on that metal for survival. Since 1986, Mazarin and Le Fonds have spent $500,000 ($250,000 each) in the area surrounding the mining town Fermont on exploration for precious and industrial minerals.

Graphite showings on the Lac Knife and Lac Carheil properties, located 27 and 21 km, respectively, south of Fermont, were uncovered in 1987. The showings are located in the Grenville geological province; according to Mazarin vice- president exploration Jacques Bonneau, the formation is generally steeply dipping and trends mainly to the northwest.

At Lac Knife, Bonneau said channel sampling has yielded an average grade of 15.7% graphitic carbon, the highest grade, he said, of the graphite projects currently under development in North America. More than 60% of the trenches remain open at both ends, he said; overburden has hindered the sampling program.

Exploration at Lac Carheil is not as advanced, but mapping and electromagnetic survey work have located graphite-rich schist bands which in some areas are expected to be several metres thick, Bonneau said. Kyanite showing

As for kyanite, a showing of the mineral was uncovered in 1986 by Mazarin on the Lac Croche property located 37 km south-southeast of Fermont.

Preliminary exploration indicates a zone containing 20-40% kyanite in large bluish crystals, 1-2 cm in size. Bonneau reports that on the surface, the rock is often friable and reduced to powder when sampled. An early estimate of tonnage is 4.5 million tons to a depth of 30 m.

According to Bonneau, the U.S., Sweden, India and Brazil are the leading producers of kyanite, with only the U.S. and Sweden exporting the mineral. Annual world production of the mineral is about 120,000 tons.

North America’s only producer of the mineral is Kyanite Mining in Virginia, which, according to Labeaume, is searching for a new supply of the mineral.

Industrial applications for kyanite include in blast furnaces, refractory products, glass, cement and ceramics.