Bavarian graphite mine reopens on higher prices
Published: 21 Jun 12 14:20 CET | Print version
A graphite mine in Bavaria reopened on Thursday as rising prices of raw material imports from China made German mining profitable once again. Meanwhile, the search is on to find sources of expensive raw materials closer to home.
Kropfmühl graphite mine ceased digging seven years ago as it became increasingly difficult to compete with cheap imports from China. The costs were too high and returns too low as China began selling graphite at reduced prices, putting pressure on mining companies in the West who had higher operating costs.
But now China has introduced heavy export duties on raw materials, raising world prices of graphite, copper and rare earth metals.
Happily, the management of the Bavarian graphite mine had the foresight to see that the day might come when domestic graphite mining would profitable once again, thus not putting the mine into final shutdown and keeping it ticking over instead.
"That was a good decision," said Martin Ebeling, head of Graphit Kropfmühl AG (GK), who celebrated the reopening of the traditional graphite mine on Thursday.
Graphite is used not only in tennis rackets and pencils, but is also an important component in batteries and electric cars - both of which will play an important part in Germany's ambitious renewable energy revolution.
"Graphite is classed as one of the most strategically important raw materials," said Martin Ebeling, head of Graphit Kropfmühl AG (GK). The government's plan to jump-start the growth of the electric car industry in Germany are unimaginable without a secure supply of graphite.
According to industry estimates, the production of two million electric cars a year will require 100,000 tonnes of graphite, or a quarter of the total global production. Three quarters of Germany's graphite is currently sourced in China.
Still, miners union IG BCE does not expect recent raw material price developments to lead to a mining renaissance in Germany - it would cost too much to reopen the mines shut down in the 1960s.
Yet the German government is financing the search for new mining sites in the hope of finding sources of coveted materials such as rare earth metals on German soil.
"If we find unused resources outside our front door in our own soil, we'll be less dependent on imports," said Bavarian Minister for Economic Affairs Martin Zeil.
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