Sri Lanka poised to benefit from increasing demand for ‘non-China origin’ graphite
Sri Lanka, renowned for its high-quality vein graphite, is poised to benefit from the increasing demand for “non-China origin” graphite driven by the global push towards electromobility and the US Green Industrial Policy.
A new publication by the Institute of Policy Studies of Sri Lanka (IPS) titled “ Trade Wars in Electric Vehicle Supply Chains: A Win for Sri Lanka’s Graphite Industry?” by IPS researchers, Dr Asanka Wijesinghe, Malisha Weerasinghe and Chaya Dissanayake explore the potential for Sri Lanka to join the supply chain for Electric Vehicle (EV) battery manufacturing.
The US’s strategic move to adopt a proactive green industrial policy, driven by the imperative to achieve net-zero emissions and national security concerns, presents fresh opportunities for graphite producers outside of China. The recently enforced Inflation Reduction Act (IRA) plays a pivotal role in reshaping the global EV battery supply value chain by excluding China and promoting domestic assembly and manufacturing of EV components.
Key findings from the IPS study reveal that as a result of these developments, the demand for graphite, a critical component of Lithium Ion Batteries (LIBs), is set to surge. “Non-China” graphite exporters, including Madagascar, Mozambique, and particularly Sri Lanka, are positioned to benefit from the re-alignment of the supply chain.
The Partial Equilibrium modeling results indicate that Sri Lanka holds a strategic advantage in the emerging market. Sri Lanka’s vein graphite, known for its purity, flawless crystal structure, and strong electrical conductivity, stands out as an ideal choice for the growing global demand. Despite facing challenges in terms of cost competitiveness, Sri Lanka’s focus on sustainable practices, minimal environmental impact, and compliance with acceptable labour standards positions it as a key player in the evolving landscape of “non-China” graphite exports.
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