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Canada’s Northern Graphite (TSX-V: NGC), the only flake graphite producer in North America, will place its Lac des Iles mine in Quebec under care and maintenance by the end of 2025 ($7.2m) for an expansion.

Chief executive Hugues Jacquemin the company imposed strict cost controls last year to preserve cash while pushing forward with exploration at Lac des Iles and launching a battery materials division in Frankfurt. The new unit supports Northern’s broader mine-to-battery strategy as part of its bid to vertically integrate operations.

“Despite geopolitical uncertainty, we sold near-record volumes and expanded our market reach,” Jacquemin said in the . A 50% crash in graphite prices over the past year, driven by sluggish electric vehicle sales and price undercutting by China, weighed heavily on performance. Northern Graphite, while not supplying battery makers directly, has felt the impact of the broader battery metals downturn.

Beijing, which controls more than 70% of the graphite market, continued to exert pricing power, tightening export controls on graphite to the United States late last year. The move added pressure on Western producers already contending with low prices and a lack of investment.

“We’re putting a lot of pressure on all stakeholders, including the government, to help us finance,” Jacquemin . “We don’t want the only producing graphite mine in North America to be shut down. It’s like killing the golden goose,” he added.

The Lac des Iles mine, in operation for 35 years, primarily serves US industrial clients. In October, the company announced plans to double output from 10,000 to 15,000 tonnes annually starting in 2025. It began the permitting process in Q1, with continued mining contingent on new funding. Last year, the mine produced 12,000 tonnes of graphite.

Jacquemin warned that if the plant is shuttered, the company may not reopen it, instead shifting focus to its African operations. He said geopolitical risk and over-reliance on Chinese supply have made investors wary.

“Whether it’s investors, government, or banks, we need some help,” he told the news agency.

Northern Graphite reported a C$7.5 million ($5.4m) operating loss for 2024, including C$5.4 million ($3.9m) in non-cash charges related to depreciation and share-based compensation. 

Strong demand

Despite market headwinds, industrial demand for graphite — particularly in the refractory sector — remained strong in 2024 and is expected to stay firm through 2025, especially in North America, which accounts for 85% of the company’s sales.

Large and jumbo flake graphite, essential for industrial use, has grown scarcer as China scaled back mining amid a glut of anode material. Global supply is further constrained due to disruptions at a major mine in Mozambique and issues at new international projects.

Adding to supply tension, the US has imposed tariffs on both natural and synthetic graphite from China. These could rise dramatically, as American producers have requested anti-dumping tariffs as high as 920%, alleging unfair trade practices.

A decision from the US Department of Commerce and International Trade Commission is expected in the coming months.