Antananarivo: As the demand for electric vehicles continues to surge globally, Madagascar's graphite has emerged as a crucial resource in the production of batteries. The country has seen its share of global natural graphite rise from about 2% in 2018 to approximately 12% at present, largely due to the establishment of new industrial mines and a significant increase in African output, which is projected to more than double to around 559,000 tons by 2029.
According to Anadolu Agency, this growth positions Madagascar as a key alternative supplier for automakers, particularly as China, which still dominates with roughly 77% of global mine production and a larger share of processing, introduced export licenses in 2023 for high-purity synthetic and natural graphite. These licenses require exporters to specify end users and applications, making Madagascar's graphite an attractive option for manufacturers navigating new EU and US battery regulations.
For years, Madagascar's graphite mining was characterized by small-scale operations focused on industrial uses rather than high-tech applications. However, the past 15 years have seen a transformation driven by booming global demand for batteries. Foreign companies from countries such as Canada, Australia, Britain, and India have invested in Madagascar, acquiring mining rights, modernizing equipment, and building advanced processing plants to produce high-purity flake graphite suitable for battery anodes and other premium applications.
The graphite industry in Madagascar is led by foreign-listed companies targeting the battery market. Notably, NextSource Materials, a Canadian-listed company, operates the Molo mine in the south, while Indian-listed Tirupati Graphite manages the Sahamamy and Vatomina mines on the east coast. Australian-listed Greenwing Resources owns the Graphmada project, currently on hold, and the Maniry project in the southwest, run by Australian-listed Evion Group, has EU strategic status to expedite approvals and funding.
New EU regulations are reshaping graphite sourcing and traceability, requiring companies to demonstrate compliance with strict environmental, social, and labor standards. This push for responsible sourcing is prompting Madagascar's producers to enhance practices, improve worker protections, and adopt better traceability, despite limited local oversight.
Madagascar's graphite sector faces political uncertainties following an October 2025 military takeover spurred by protests over electricity shortages, poverty, and alleged corruption. These events raised political risks for graphite projects, including potential resource-nationalist measures. Despite these challenges, companies like NextSource report uninterrupted mine operations and ongoing shipments, although financing terms have become tougher.
The United States Geological Survey (USGS) Mineral Commodity Summaries in 2024 reveal that the US, having produced no natural graphite in 2023, imported about 84,000 tons, with 12% sourced from Madagascar. This marks Madagascar as a significant non-Chinese supplier to the US market. However, unlike Mozambique's Balama mine, which received US government support, Madagascar's graphite projects lack specific US financing packages.
The US policy landscape favors natural graphite producers outside China, with raw imports to the US remaining duty-free. In contrast, Chinese synthetic and processed graphite face higher tariffs, enhancing the competitiveness of Madagascar's supply for US and allied plants. The US Commerce Department's July 2025 decision to impose a preliminary 93.5% anti-dumping duty on Chinese anode-grade graphite further boosts the economics for Western miners in Madagascar.
Western firms operating in Madagascar face structural challenges due to China's dominance in the graphite value chain. Chinese companies have established expertise, customer networks, and integrated operations that Western firms struggle to match. Chinese buyers offer guaranteed conversion into battery-grade material, while Western groups must build or expand non-Chinese processing capacity.
The EU and US rules, coupled with US-China trade tensions, are driving non-Chinese graphite processing initiatives. Projects like NextSource's anode facility and Evion's planned plant in Germany are based on Madagascan feedstock. However, the bulk of value addition still occurs outside Madagascar, with the country's primary leverage lying in its growing share of high-quality natural graphite supply.