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

Graphite use is anticipated to select up within the coming years because of electrical automobiles (EVs). It’s utilized in lithium batteries and because the EV development continues, these graphite shares ought to climb larger. Let’s check out a couple of of the very best graphite investing alternatives…

Finest Graphite Shares to Purchase

In 2021, there was no pure graphite produced in the US. Nonetheless, it imported greater than 53,000 tons.

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

And simply as there are lots of makes use of for graphite, there are additionally many firms to think about. A few of the finest graphite shares embrace:

• Nouveau Monde Graphite (NYSE: NMG)
• NextSource Supplies (OTC: NRCSF)
• Syrah Sources (OTC: SYAAF)
• Magnis Power Expertise (OTC: MNSEF)

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

Nouveau Monde Graphite

First up on the checklist of the very best graphite shares is the one one which trades on a significant US alternate, 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 line with a feasibility examine, the mine has projected graphite focus manufacturing ranges of 52,000 tons per 12 months for almost 30 years. Nouveau Monde goals for this to be a completely electrical graphite mine.

To maintain up with the persevering with EV development, it’s additionally working in the direction of vertical integration. This is able to permit it to ship anode battery supplies on to the market. Its proposed plant to Bécancour just isn’t up and working but, but when plans maintain going forward this may very well be a high graphite inventory to look at.

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 amenities to provide 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 Large Vanadium Mission and the Molo Graphite Mission.

The Molo Graphite Mission 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 include greater than 140 million tons of graphite. In 2021, a examine started for an expanded Part 2 capability of at the very least 150,000 tons per 12 months. 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 may turn out to be a significant provider as lockdowns in China are forcing folks to look elsewhere for his or her provide.

It needs to be the primary main built-in producer of graphite for anode supplies that isn’t based mostly in China. As an alternative, it operates a manufacturing unit in Vidalia, Louisiana to provide 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 supply pure graphite energetic anode materials. With two offers from outstanding automobile firms, Syrah Sources may very well be a high graphite inventory to purchase.

Magnis Power Expertise

The final graphite inventory on this checklist is Magnis Power Expertise, 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 novel graphite processing methodology that lets or not it’s extra environmentally accountable in addition to worth aggressive. And it doesn’t depend on the Chinese language provide chain, which has been inconsistent with lockdowns.

One other of Magnis Power Expertise’s subsidiaries, Imperium3, has two lithium-ion battery vegetation. 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 capable of scale up efficiently, it may turn out to be probably the greatest graphite firms.

Different Graphite Investing Alternatives to Contemplate

When you don’t wish to put money into only one firm, however nonetheless need publicity to the graphite business, the World X Disruptive Metals ETF (DMAT) is an efficient possibility to think about. This focuses on firms producing uncooked supplies that go into disruptive applied sciences. This, in fact, consists of 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 belongings. And has an expense ratio of 0.59%. This can be a nice possibility for individuals 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 may very well be a scorching commodity. However these graphite shares are a guess on the longer term. So, as at all times, it’s essential to do your due diligence earlier than making any funding choices.