By Richard (Rick) Mills

As a general rule, the most successful man in life is the man who has the best information

Sometime between 1500 and 1565 a large graphite deposit was discovered in Cumbria, England. Because the graphite was extremely pure and solid it could easily be sawed into sticks. The graphite was actually thought to be a form of lead and called plumbago - Latin for lead ore.

The Borrowable Mine was soon ordered to be put under armed guard by Queen Elizabeth because the "lead" could be used to line the moulds for making her armies cannonballs. But black marketers managed to smuggle out the graphite for continued use in pencils. Artists from all over the known world quickly learned to appreciate the qualities of Cumbria's graphite but it wasn't until 1795 that Nicholas Conte learned to mix graphite powder with clay and fire it in a furnace to actually make something with the equivalent quality of Borrowables plumbago.

Today graphite (named for the Greek word meaning "to write") is attracting the attention of investors, and for just as good a reason as it once attracted all those artists 500 years ago.

Carbon

By mass carbon is the fourth most abundant element in the universe (after hydrogen, helium, and oxygen) and it's the 15th most abundant element in the Earth's crust. Carbon is present in all known life forms and is the second (oxygen is first) most abundant element by mass - about 18.5% - in the human body.

Carbon is the stuff of life, it is the foundation, the chemical basis, of every living thing on Earth, yet because of its pervasive familiarity we all take it for granted.

As investors we might want to rethink that.

Allotropes are structural modifications of an element - the allotropes of carbon include:

  • Diamond - The carbon atoms are bonded together in a tetrahedral lattice arrangement
  • Fullerenes - The carbon atoms are bonded together in spherical, tubular, or ellipsoidal formations
  • Graphite - The carbon atoms are bonded together in sheets of a hexagonal lattice
  • Graphene - A flat two-dimensional sheet of carbon atoms

Graphite

Graphite has long been used in the aviation, automotive, sports, steel and plastic industries, as well as in the manufacture of bearings and lubricants. Graphite is an excellent conductor of heat and electricity, is corrosion and heat resistant and is also strong and light.

Currently, the automotive and steel industries are the largest consumers of graphite and demand across both industries is rising at five percent per annum.

The steel industry uses graphite as liners for ladles and crucibles, they use it in the bricks which line blast furnaces and to increase the carbon content of steel. Graphite has already replaced asbestos in automotive brake linings and pads and is used for gaskets and clutch materials. Sparks plugs are also made incorporating graphite.

But demand for graphite has been rising for other applications as well; Flexible graphite sheets, lithium-ion and vanadium batteries, fuel cells, semi conductors, nuclear, wind and solar power.

Graphoil

Graphoil is flexible graphite sheets and one of the fastest growing graphite markets. Flexible graphite is desirable for compression packing and gaskets, whose ability to seal comes from filling gaps through which fluid might flow.

Flexible graphite products have valuable properties:

  • Free from creep under constant load
  • Stable from cryogenic temperatures far below zero to temperatures well above the melting point of most ferrous and non-ferrous metals
  • Resists a wide range of corrosive materials
  • Nuclear radiation resistant even when exposed to massive doses of radiation
  • Fire-safe in the presence of highly volatile fluids and extremely high temperatures

Nuclear Power

Graphite plays a key role in many current, and future, nuclear reactor designs. The next generation nuclear reactor (the INL-led Next Generation Nuclear Plant (NGNP) and other proposed high temperature, gas-cooled reactors) temperatures are expected to reach as high as 1,000