Chinese Export Controls Spotlight Risks and Opportunities for Lithium Energy’s Graphite Projects
Lithium Energy has completed Phase 1 drilling at its high-grade Burke and Mt Dromedary graphite deposits in Queensland, with Phase 2 drilling set to begin in January 2026. The company is also exploring a vertically integrated battery anode material business to capitalize on shifting global supply dynamics.
- Phase 1 drilling completed with graphitic schist encountered in all holes
- Phase 2 drilling scheduled for early January 2026 targeting resource expansion
- Combined 4.42Mt high-grade graphite inventory averaging over 14% Total Graphitic Carbon
- Chinese export controls on graphite battery anode materials increase strategic importance
- Plans underway for a vertically integrated battery anode material manufacturing facility in Queensland
Phase 1 Drilling Completion
Lithium Energy Limited (ASX – LEL) has announced the successful completion of Phase 1 of its resource drilling program at the Burke and Mt Dromedary Graphite Deposits in Queensland. The initial phase comprised seven reverse circulation (RC) holes totaling 744 meters and two diamond holes totaling 151 meters, focusing on previously undrilled areas between the two deposits. Encouragingly, graphitic schist, a key indicator of graphite mineralisation, was encountered in every drill hole, suggesting continuity of high-grade graphite mineralisation across the project area.
Upcoming Phase 2 Drilling and Resource Potential
Building on these results, Lithium Energy plans to commence Phase 2 drilling in early January 2026, with 23 RC holes and 4 diamond holes planned to further delineate and expand the resource. The company currently holds a world-class combined inventory of 4.42 million tonnes of high-grade natural graphite, with average grades exceeding 14% Total Graphitic Carbon (TGC) at the Burke and Mt Dromedary deposits. These grades are notably higher than many global peers, positioning Lithium Energy well within the competitive graphite market.
Strategic Importance Amid Chinese Export Controls
Recent tightening of Chinese export controls on graphite and battery anode materials (BAM) has sent ripples through global battery supply chains. China’s dominance in supplying graphite-based anode materials means these new restrictions could disrupt availability and pricing. Lithium Energy’s Burke Graphite Project emerges as a strategically important alternative source of high-quality graphite, potentially mitigating supply risks for battery manufacturers worldwide.
Vertical Integration into Battery Anode Material Manufacturing
In response to evolving market dynamics, Lithium Energy is evaluating the development of a vertically integrated BAM manufacturing business in Queensland. The plan involves mining high-grade graphite from the Burke and Mt Dromedary deposits, producing a +95% TGC graphite flake concentrate onsite, and then processing it into spherical purified graphite (SPG) and coated spherical purified graphite (CSPG) at a dedicated facility. These products are critical inputs for lithium-ion batteries and energy storage solutions, aligning Lithium Energy’s strategy with the growing demand for battery materials in electric vehicles and renewable energy sectors.
Next Steps and Market Implications
Assay results from Phase 1 drilling are expected in January 2026, which will provide more definitive data on grade and mineralisation continuity. Further metallurgical testing and environmental baseline surveys are also planned to support resource estimation and future mine development. Investors and market watchers will be keen to see how these developments unfold, especially given the geopolitical shifts impacting graphite supply chains.
Bottom Line?
As Lithium Energy advances drilling and vertical integration plans, it positions itself as a key alternative graphite supplier amid tightening global supply constraints.
Questions in the middle?
- What will the Phase 1 assay results reveal about the quality and extent of graphite mineralisation?
- How quickly can Lithium Energy progress its battery anode material manufacturing facility from evaluation to production?
- What impact will China’s export controls have on global graphite prices and Lithium Energy’s market positioning?
