Sri Lanka possesses a unique advantage in the global market – its graphite. This high-quality mineral, known as vein graphite, is considered the best in the world. A recent study by the International Policy Studies (IPS) highlights this potential, urging the country to capitalize on the rising demand for electric vehicles (EVs).
The report, led by Dr. Asanka Wijesinghe and his team, emphasizes Sri Lanka’s edge despite its current limitations. While production is modest and vein graphite prices are higher compared to China, the global EV market is projected to explode, reaching a staggering 80 million units by 2050. The United States alone is expected to demand a significant share of this, creating a massive opportunity for non-Chinese graphite suppliers like Sri Lanka.
Professor Anura Wijayapala, a leading electrical engineer, emphasizes that Sri Lanka can move beyond simply exporting raw materials. He sees potential in developing upstream value chain products, such as value-added components for the EV market. While Sri Lanka’s current graphite reserves are insufficient to meet the entire US demand, the high quality offers a distinct advantage. Branding Sri Lankan graphite as environmentally friendly and produced through sustainable practices could further enhance its value.
However, challenges remain. High mining costs due to deep pit operations limit production. CEO Amila Jayasinghe of Bogala Graphite PLC believes expanding mining operations to new locations with shallower deposits could significantly reduce costs. Regulations and a lack of transparency in obtaining mining permits are also deterring potential foreign investment. Furthermore, the current royalty fee structure discourages local producers from processing graphite into higher-value products.
Despite these hurdles, there are reasons for optimism. The Export Development Board (EDB) is actively exploring ways to integrate Sri Lankan graphite into global EV manufacturing. Deputy Director Akila de Zoysa highlights the potential of value addition, including the production of graphene, a derivative with even higher market value. The recent announcement of a multinational company planning an EV battery assembly plant in Sri Lanka, in partnership with a Swedish company, is a positive development. The EDB is working to connect local graphite producers with this venture.
Sri Lanka’s focus on green practices is another advantage. The country’s reliance on renewable energy and its comparatively low greenhouse gas emissions position it well to market “green graphite” to environmentally conscious buyers.
In conclusion, Sri Lanka’s future in the graphite industry hinges on strategic planning and innovation. By focusing on competitive pricing, establishing strategic international partnerships, and adopting sustainable practices, Sri Lanka can leverage its world-class graphite reserves to become a key player in the global EV supply chain.