Westwater Resources: Graphite buyers ready to pay IRA premium
TL/DR –
Westwater is building a battery-grade graphite processing plant in Alabama and has already signed an offtake agreement with South Korean EV battery manufacturer SK On. The company aims to establish a domestic industry for this critical material, which is currently dominated by China. The US government’s decision to increase tariffs on Chinese EVs and natural graphite imports has been praised by Westwater, as it believes this will help the new US-based natural graphite industry compete with China’s monopoly, though Chinese sources suggest the tariffs won’t significantly impact Chinese EV manufacturers.
US Firm Aims to Disrupt China’s Dominance in Graphite
Westwater, a Centennial, Colorado-based company, is working towards disrupting China’s dominance in the global graphite industry. With its Kellyton battery-grade graphite processing plant in east-central Alabama, Westwater presents a potential shift in the supply-chain of this critical component.
According to the executive chairman, Terence Cryan, battery manufacturers and OEMs are willing to pay a premium for IRA-compliant domestic material. This willingness is evident in the offtake agreement with South Korean EV battery manufacturer, SK On, for supply to their US plants.
The US graphite industry is set to see significant growth with approximately 17 battery Giga plants under development. However, at present, the US doesn’t produce any graphite domestically, outsourcing all anode material for lithium-ion batteries from China. Graphite represents about 50% of a lithium-ion battery by weight.
Westwater, unlike Chinese companies, does not use hydrofluoric acid to produce coated spherical purified graphite (CSPG), focusing on environmental sustainability. Cryan reveals that while cost is a significant factor for manufacturers, they are also keen on reducing their environmental footprint.
The US government’s recent implementation of 25% tariff on Chinese natural graphite imports from 2026 and increase of tariffs on Chinese EVs to 100% has been applauded by Westwater. This new regulation will likely bolster the US-based natural graphite industry, providing a competitive edge against Chinese monopoly.
The US Treasury Department has also granted automakers a two-year extension to 2027 on restrictions to some hard-to-trace minerals from China, such as graphite in anodes.
Despite these efforts, the tariffs are unlikely to impact Chinese EV manufacturers significantly, according to sources in China. Additionally, the spread between Chinese and European graphite prices recently hit a five-year high due to a variety of market dynamics.
Fastmarkets’ assessment for graphite flake 94% C, -100 mesh, cif Europe stood at $600-700 per tonne while the graphite flake 94% C, -100 mesh, fob China was $460-481 per tonne on May 23.
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