Vianode's contract with General Motors is an important win for the company as it attempts to establish a North American critical minerals presence that will allow the industry to better compete with China.Tijana Martin/The Canadian Press
Norwegian company Vianode has landed a multibillion-dollar deal to supply synthetic graphite to General Motors Co. GM-N for electric vehicles, as it closes in on announcing a manufacturing plant in North America.
The contract for privately held Vianode with the big U.S. carmaker is an important win for the company as it attempts to establish a North American critical minerals presence that will allow the industry to better compete with China, the dominant force worldwide in graphite.
China dominates global production for natural mined graphite and synthetic graphite. According to data from the United States Geological Survey, China produced 77 per cent of global mined graphite or 1.6 million tonnes in 2023. The United States produced no natural graphite. The sole Canadian producer is Northern Graphite Corp., which operates the Lac des Iles mine in Quebec. It produced just over 3,200 tonnes in its most recent quarter.
Putting a synthetic graphite plant into operation tends to be far quicker than developing and building a mine, which can easily take a decade or more.
Synthetic graphite is made from coke, a carbon-heavy byproduct of the petrochemical industry, and a binding material called pitch.
“From all the public information that is available, this is by far the largest such agreement for synthetic graphite anode material for electromobility in the western world,” Burkhard Straube, chief executive of Vianode, said in an interview with The Globe and Mail.
Vianode plans to produce the graphite at a plant in North America that hasn’t been built yet. Mr. Straube said that production from the site should start in the second half of 2027. At that point, Vianode will be able to produce up to 150,000 tonnes of synthetic graphite a year, far more than the 2,000 tonnes annually at its existing plant in Norway.
Vianode has not revealed the location of the North American plant, but there are strong signs it will be in Ontario. The company has set up a Canadian subsidiary, and it is looking for staff in project construction, engineering, procurement and communications to work in the Toronto area. Vianode doesn’t have any similar postings in the United States.
“We are in advanced negotiations, and we hope to be able to announce the site within a couple of months,” Mr. Straube said. “What I can say is the site is in the proximity of the U.S.-Canadian automotive cluster.”
Anode materials produced at Vianode’s North American plant will be fully compliant with the Inflation Reduction Act, meaning cars purchased by consumers using the graphite manufactured in the plant could qualify for tax credits in the U.S. Mr. Straube said that the financial case for building a plant in North America is stronger than in Europe.
“It is really the IRA and the support agreements in North America that is supporting both the demand and the supply side.”
Canada over the past few years has attracted tens of billions of dollars in investment from foreign companies that agreed to build EVs, EV battery plants and EV parts components. Canada has even managed to beat out the U.S. in attracting that investment, in part owing to generous production subsidies that could be worth billions over the production life of factories. Among the companies that have announced plants are Honda Motor Co., Volkswagen and Stellantis NV.
The synthetic graphite manufacturing process involves heating carbon to temperatures of around 3,000 C. It has more in common with chemicals manufacturing than traditional mining. Owing to the extreme heat in the manufacturing process, synthetic graphite is extremely energy-intensive. Mr. Straube said that Vianode uses carbon-neutral, or carbon-free energy sources, such as nuclear power. The company’s proprietary manufacturing process uses 40 per cent less energy than Asian competitors, according to Mr. Straube.
North America has only one synthetic graphite plant, which is operated by Australia’s Novonix in Tennessee.
Vianode is owned by Swedish private equity group Altor.
China produces about 80 per cent of the global output of synthetic graphite.
China has repeatedly used its dominance to exert leverage over the West in critical minerals such a graphite. The Asian superpower last month said it was stopping exports of gallium, germanium and antimony to the U.S., citing national-security concerns. China also said it would subject graphite, which was already targeted by export restrictions in 2023, to greater scrutiny.