CATL Buys Stake in CarbonScape to Scale Forestry-Based Battery Graphite

Contemporary Amperex Technology (SZSE:300750,HKEX:3750) (CATL) has acquired a strategic interest in CarbonScape, a New Zealand-based company that converts forestry byproducts into graphite for lithium batteries.

Under the terms of the agreement, CATL and Hong Kong-based investment firm Lochpine Capital will take a combined 20 percent stake in CarbonScape with an aim to scale the production of bio-based graphite to supply the global automotive and energy-storage industries.

CarbonScape’s technology will undergo demonstration-scale testing at CATL’s facilities in China before full-scale commercial deployment.

“Together, we aim to bring commercial biographite production online by the end of the decade,” CarbonScape CEO Ivan Williams said in a statement on Monday (July 6).

Graphite is a primary raw material for battery anodes, and China currently controls the global supply chain. The rest of the world faces structural deficits of both natural and synthetic graphite until at least 2031.

CarbonScape expects global demand for battery-grade graphite to grow approximately sixfold between 2025 and 2040.

More than 75 percent of graphite currently used in batteries comes from oil-based feedstock. CarbonScape’s alternative process utilizes forestry waste and residues, which require lower processing temperatures.

The company has operated a pilot plant in New Zealand for several years and plans to make a final investment decision on its first industrial-scale facility by late 2027 or early 2028, targeting market supply between 2029 and 2030.

Prior to the deal, an expected supply influx from CATL’s domestic lithium operations led China’s lithium carbonate futures falling nearly 10 percent over two trading sessions, dropping to a 10-week low of approximately US$23,175 per ton.

The market drop followed reports that CATL’s Jianxiawo lithium mine in Yichun, Jiangxi province, passed its preliminary land pre-review and site selection.

The Jiangxi Provincial Department of Natural Resources issued a project land use pre-approval valid from June 17, 2026, through June 17, 2029.

The Jianxiawo mine produces approximately 46,000 tons of lithium carbonate annually, representing roughly 3 percent of global supply. Operations at the site were suspended in August 2025 following the expiration of a mandatory permit.

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Securities Disclosure: I, Giann Liguid, hold no direct investment interest in any company mentioned in this article.