Graphene stocks could boom with many commercial, military and aerospace growth opportunities
Graphite is one of two naturally occurring crystalline forms of carbon (the other is diamond). Graphene stocks include companies that own graphite mines ( including Northern Graphite below, which we looked at in response to questions from members of our Inner Circle) as well as companies, like IBM, that use graphene to develop products.
Graphite is a soft, greyish-black mineral with a metallic sheen. A graphite crystal is made up of loosely stacked one-atom-thick layers, much like a deck of cards. These layers can slide around, which makes graphite a good lubricant.
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Graphite is also an excellent conductor of heat and electricity and is relatively inert, being unaffected by most chemicals. It maintains its properties even at temperatures in excess of 3,500°C.
Many investors are interested in graphite because it is used in the lithium-ion batteries that power electric cars. But it has a number of other profitable uses, as well.
For example, in the steel industry, graphite is mainly used to strengthen the bricks that line furnaces. When added to steel itself, graphite increases the metal’s carbon content and makes it stronger.
In the automobile industry, graphite is used in gaskets, brake linings and clutch materials. It also has a range of other industrial uses, including in components of electric motors, batteries, lubricants and pencils.
Graphene stocks strengthened by graphene sheets
Graphite is increasingly used in flexible heat spreaders for electronic devices such as smartphones, flat-panel displays, laptops and tablets. For example, Apple’s iPhone contains a heat spreader made from an ultra-thin layer of graphite that distributes heat evenly throughout the device and keeps the touch screen cool. Traditionally, aluminum and copper have been used for heat spreaders, but graphite is lighter, and it conducts heat better than either of these metals.
Another developing use for graphite is in graphene sheets. Two Manchester University scientists discovered graphene in 2004 and subsequently won the Nobel Prize in Physics.
Graphene sheets are so thin that it takes three million of them to make a layer one millimeter thick. It’s estimated that a sheet of graphene as thick as cling wrap could hold the weight of an elephant. Graphene also conducts electricity better than copper or aluminum and can stretch by up to 20% without being damaged. Once it’s fully developed, graphene could have many commercial, military and aerospace uses.
Right now, though, graphene is not developed enough to be used commercially.
One major problem is that graphene adheres to almost nothing. As well, it can’t be glued to anything, because there are no glues that work at that level of thinness.
Where to invest in graphene stocks
Northern Graphite first sold shares to the public in April 2011, when it raised $4 million by issuing 8 million common shares at $0.50 each. The company subsequently listed on the TSX Venture exchange under the symbol NGC.V.
Northern Graphite believes that its deposit contains large crystal-graphite flakes, which command a premium price. The company continues to drill to further define the deposit. It has also reported positive results from a recent test to determine whether the ore can be processed into high-quality graphite concentrate that is ready for sale.
Graphite demand will likely continue to rise as global economies recover. However, there are potentially mineable graphite deposits elsewhere in Canada and around the world. These deposits could be brought into production if prices rise high enough.
As well, higher prices would likely spur manufacturers who use graphite to look for substitutes (including synthetic graphite in certain applications), and to increase recycling. All of this could affect longer-term demand for Northern Graphite’s graphite.
The best way to invest in graphene at this early stage is through major technology companies like IBM, who are funding the next stage of its research into graphene computer chips. Graphene’s extremely high conductivity would make it ideal for this use.
What’s a mining stock?
Mining stocks are investments in companies that produce or explore for minerals, such as uranium, coal, molybdenum (which is used in steelmaking), copper, silver and gold.
Mining stocks can generally be broken up into two categories, majors and juniors. Majors are mining companies that have been in the mining business for many years and more often than not they operate on global scale. Majors have proven methods for exploration and mining, and have consistent output year over year.
Junior mining stocks are mining companies that are new or have been in business for a decade or less. They are usually smaller companies and take on risky mining projects. If a junior mining stock is successful at finding and mining, it can mean huge returns for investors.
Have you invested in graphene stocks? How have they performed for you?
This article was originally published in 2015 and is regularly updated.