Although graphite in its natural state is utilized worldwide in the production of electric vehicle (EV) batteries, Sri Lanka’s graphite holds significant potential for export to EV manufacturing nations. In the preceding year, the US alone produced one million EVs, while global EV production reached 85 million units.
In 2019, Sri Lanka ranked as the 11th largest global graphite supplier, with exports valued at US$ 4.6 million and a volume of 2570 metric tons, representing a mere 0.9% of the global market share.
The Institute of Policy Studies (IPS) recently unveiled a report titled ‘Trade wars in electric vehicle supply chains: A win for Sri Lanka’s graphite industry.’ Stakeholders emphasized the scarcity of graphite mines in Sri Lanka, which fails to meet the burgeoning demand. India has expressed interest in establishing graphite mines in Sri Lanka due to the surging global demand for raw graphite in EV battery manufacturing.
The report underscores Sri Lanka’s comparative advantage in graphite exports, albeit with low volume and relatively high prices in key markets. Sri Lanka faces competition from inexpensive producers, while discriminatory US industrial policies present an advantageous position for Sri Lanka. Notably, Mozambique, Madagascar, and Sri Lanka stand out as major non-China graphite suppliers.
Furthermore, the study identifies promising opportunities for Sri Lanka in the upstream segment, particularly in graphite mining and processing for battery-grade material. Strengthening trade ties with ASEAN nations and exploring mineral trade agreements with the US could attract investments to bolster Sri Lanka’s mining sector.
Despite challenges posed by US green industrial policies, the study recommends strategic initiatives for Sri Lanka, including value addition through anode production and investments in research and development. Establishing battery testing laboratories for local university researchers would enhance technical expertise in EV battery component manufacturing, fostering high-quality job opportunities within the sector.
