A Crash Course On Graphite And Profitable Graphene...

I was in London last month to attend a major international conference on graphite and graphene.

These “graph” metals represent a budding opportunity in the resource space — indeed, we’re just learning what newly discovered graphene can do.

Today I want to give you a crash course on graphite and graphene. Plus, I’ll also give you a way to play this trend, as soon as this week…

What’s Graphite?

What is this stuff? Why invest in graphite? Isn’t graphite just squished-up coal that’s been metamorphosed and turned into really slick carbon? Don’t you find graphite in metamorphic rocks all over the place? Can’t you just buy graphite down at the hardware store and squirt it into the lock on a door when the key sticks? How do you make money with graphite?

Those are good questions. First, let’s define what we’re talking about. Graphite is a metamorphic mineral composed of pure carbon. Geologically, and based on how we find it in the crust, graphite is a super-high grade of carbon, likely from coal or organic-rich black shale (not always, but mostly).

Sticking with the coal-grading sequence, though, let’s just think about peat — like in the bogs of Ireland and such. It gets buried, and then — after application of time, pressure and heat — the peat turns into lignite, bituminous and, eventually, anthracite coal.

Squeeze that anthracite some more and you get “meta anthracite,” a fancy way of characterizing graphite. The thing is, graphite doesn’t ignite very well — an advantage in most respects — so it’s not at all a hydrocarbon fuel. Indeed, graphite won’t burn until you heat it to over 3,000 degrees Celsius — far above the melting point of steel.

Graphite, then, is a mineral based on the element carbon. In terms of crystallography, there are three common types. There’s diamond, in which the carbon atoms are bonded together in a tetrahedral lattice arrangement. This lattice arrangement is why diamond is very hard.

There are other forms of pure carbon called “fullerenes,” named after the late, great Buckminster Fuller. In fullerene structures, the carbon atoms are bonded together in spherical, tubular or ellipsoidal formations. It’s astonishing crystal science at work. Fullerenes are so new to our collective knowledge that people are just starting to figure out what to do with them. But it’s safe to say that the technology of fullerenes is very promising.

Then there’s the point of this article: graphite. You get graphite when the carbon atoms are bonded together in sheets of a hexagonal lattice. The “sheet” structure is what makes graphite slippery, and useful as a lubricant.

Graphite was chemically identified in 1789 by a German scientist named Abraham Werner. Werner named the substance after the Greek word γράφω (graphō), meaning to draw or write. Even back then, graphite was used in pencils. (No, a “lead” pencil is not made of the element lead!)

Unlike a diamond, graphite is a semimetal. Every carbon atom in graphite has what’s called a “free valence electron.” Hence, graphite is an electrical conductor. Graphite is very stable. It’s lightweight, chemically resistant, hard, scratch-resistant and a great means of transferring heat energy.

Graphite burns at a very high temperature (3,000 degrees or so, as I mentioned above). Therefore, graphite is useful in numerous electrical and thermochemical applications, from arc lamp electrodes to thin-film heat sinks — such as are contained within your Apple iPad. Quite a bit of natural graphite is consumed in refractory processes, electric arc steel making, brake linings, foundry facings and lubricants.

An Amazing Opportunity In Graphite

There’s also a substance called graphene, which occurs naturally in graphite. Graphene has unique physical properties. It may be one of the strongest substances ever identified.

On that score, we’re still in the very early innings of understanding the technology that could come out of graphene. There’s plenty more to come from the world of graphene and future investment opportunities that we’ll discover over time.

Even early in the game this “super substance” represents an amazing opportunity for resource investors, considering the fantastic technical applications.

Will graphene replace silicon in computer chips? Yes, and it won’t take too long.

Graphene is thin, strong and electrically conductive. You can etch it. You can stack it and build whatever transistor you want to design.

“It is not only the thinnest material in the world,” says The New York Times, “but also the strongest: a sheet of it stretched over a coffee cup could support the weight of a truck bearing down on a pencil point.”

It’s not overstating the case to say that silicon is becoming obsolete. Somebody ought to tell the chip makers. OK, I’m just kidding — sort of. The chip makers know this. Indeed, you’ll eventually see graphene technology in common items like hand-held devices.

Can you add graphene to metal or plastic and make materials much stronger? I’m glad you asked, because you sure can. You can actually add graphene to molten metal and when it cools, the graphene crystals will align within the metallic crystal structure. It helps that graphene doesn’t even begin to break down until over 3,000 degrees Celsius — hotter than the melting point of almost any metal. So now you can have graphene-strengthened supermetals.

In fact, the head chemist for one company I’ve been following showed me a piece of boring old polystyrene plastic that he re-extruded and impregnated just with nanotubes — not even graphene. The stuff was nearly unbreakable. “This was just to prove up the extrusion process,” he said. “Now imagine how strong that’ll be when we add actual graphene.”

Using graphene, we’re talking about an entire new generation of supermaterials, with Star Trek qualities. In one back-of-the envelope calculation, we figured that a graphene-strengthened piece of plastic or steel just a fraction of an inch thick could offer the same protection as 8 inches of armor plate.

What else? How about alternative energy applications? Imagine graphene coatings on windows that, in effect, create solar panels with efficiencies over twice what people are currently getting from the best panels. Think in terms of solar cells with 75% efficiency and more. Maybe we really will see solar-powered skyscrapers.

This insight alone was worth the trip to London last month, yet there was even more to learn about graphite, let alone from the other companies and people I visited.

As you can tell, there’s much going on in this carbon space and I’ve barely scratched the surface!

In fact, this week I’m set to release a brand new recommendation in the graphite space. It’s a large company that’s in the sweet spot of this market — and should be set to cash in on this budding trend over the years to come. For more information, and to get your hands on this recommendation click the Outstanding Investments link below…

Thanks for reading.

Byron King
for The Daily Reckoning

The Daily Reckoning