is the latest in demand, but the unprecedented growth of the graphite market is going through a few growing pains. The price of graphite has trended upwards but is prone to fluctuations. The big issue is that the graphite market lacks transparency, according to the , and that uncertainty is making it hard for miners and producers to get funding.

is currently the world’s largest producer and refiner of natural graphite, a crucial anode material used in the electrodes of and many other modern electronics. China mines 65 percent of the global supply of graphite and 85 percent of the mineral regardless of where it came from.

As the dominant source of graphite, China has a hand in the flow of the mineral, which leaves small volumes to be traded on exchanges where prices are less stable and more opaque. But now that many other countries are making a point of domestic EV production and sourcing — like with its recent — miners like want to expand existing mines and build new ones; these miners are running into issues because investors and banks are harder to convince when the price of graphite is unclear, per the :

Shaun Verner, chief executive of Australia’s Syrah Resources, a Tesla supplier that operates a huge mine in Mozambique, said that the graphite market’s lack of transparency over pricing was making bankers hesitant to fund new projects.

“The single biggest impediment to new investment is the opaque nature of the market because to get the commercial debt in place is really challenging,” he added.

Companies such as Syrah Resources, Urbix and Nouveau Monde Graphite are planning to build mines and processing plants throughout North and South America, which could help the U.S. become less reliant on China for graphite.

Syrah is already a major supplier for American EV maker . The company is currently working to expand its 38-acre graphite facility in , where graphite ore that’s mined in Mozambique will be sent to be processed and refined. Syrah is one of the companies that was lucky enough to get federal funding from the Inflation Reduction Act, in the form of a $220 million grant.

Other miners and companies are still scrambling for funding, however, and they’re having to choose between expanding mines to meet demand or building entirely new ones. Analysts expect that the price of graphite will multiply in the next four years, but major mining projects are drawn on timelines that easily go beyond 2026. Even with graphite prices rallying, Syrah still took a loss of $9.7 million on revenues of $50 million through the first half of 2022.

And this inability to set long-term fixed prices makes for a feedback loop of unstable costs that lets dominant producers like China dig their heels in. Miners are cautiously optimistic about securing funding from the private sector, but EV metals and raw materials go to show that, now and then, the invisible hand of the market needs a little nudge from regulators and .