In 2010, the Nobel Prize for Physics went to Andre Geim and Konstantin Novoselov of the University of Manchester for their discovery of graphene — an unbelievably thin form of carbon that has quickly risen to stardom as nature’s undisputed “wonder material.”
“Lighter than a feather, stronger than steel, a superior electrical conductor,” Bloomberg says, “graphene could unlock a new era of super energy-efficient gadgets, cheap quick-charge batteries, wafer-thin flexible touchscreen computing, and a sturdier light-weight automobile…”
Sound compelling? Well, it should, but buyer beware: You may want to hold off before getting too excited about graphene investments just yet.
Graphene Mania
There’s no doubt about it: The properties and applications of graphene are astounding enough to make just about any investor’s head turn at first glance. After all, scientists have published thousands of scholarly articles attesting to the amazing potential of this newly isolated material, and hundreds of companies are already pursuing commercial efforts.
There’s also an insane amount of hype surrounding graphene. Both the Guardian and Huffington Post have recently said that graphene is poised to “change the world.” Public curiosity is steadily rising too, with Google search traffic for “graphene” looking as follows:
Not surprisingly, there are many savvy investors out there already asking, “How do I invest in graphene?” These are people who understand that by getting in on disruptive technology early, you can often set yourself up for massive returns.
Unfortunately, though, disruptive technology doesn’t always have an immediate investable path. Elon Musk’s SpaceX, for instance, may be disrupting the space industry with re-usable rockets, but there’s no reliable way for public investors to turn a profit.
Sometimes, you just need to be patient.
When it comes to graphene, the virtue of patience is resoundingly clear, though much of what you read out there may have you believing otherwise.
The Great Graphite Myth
When Andre Geim first discovered graphene back in 2002, he did so by peeling a piece of Scotch tape off of a chunk of graphite — one of eight known allotropes (physical structures) of the basic element we all know as carbon.
This method of removing flakes of pure graphene from graphite is called exfoliation. Exfoliation works because, structurally speaking, graphene is pretty much just a thin layer of graphite. The physical layout is the same, with the exception that graphene is just one atom thick.
Because of this fact, many investors see graphite as a back door to the incoming graphene revolution. After all, if graphene flakes can be peeled off of graphite, demand for the former should increase demand for the later, right?
Well, as it turns out, this isn’t exactly true. Yes, you can isolate graphene from graphite, but the process of obtaining commercial quantities is incredibly timely and inefficient. In fact, it’s widely accepted within the scientific community at this point that the road to mass graphene production will have nothing to do with graphite at all.
As Holly Evarts of Columbia University argues:
…exfoliation is a time-consuming process that will never be practical for any of the many potential applications of graphene that require industrial mass production.
That’s right; she said never. Even if you owned all the graphite on the planet, chances are good you wouldn’t even get a piece of the commercial graphene market when it hits.
Yet the public’s general misunderstanding of how graphene exfoliation works has sparked a wave of deception, primarily from disingenuous junior graphite miners struggling to keep their operations afloat.
As Michael Van Der Meer of EEA Fund Management has pointed out:
The oversimplified link between graphite exfoliation and graphene production has been a field-day for OTC traded graphite mining companies who have jumped on the graphene bandwagon by issuing promising press releases — while at the same time making private placements to keep their cash-strapped companies afloat.
In other words, junior miners have been quick to dupe unsuspecting victims into thinking that investing in graphite and investing in graphene are one and the same, all for a quick buck.
The truth, of course, is that by investing in graphite, you’re really putting your money in not much more than powdered lubricants, golf clubs, and pencils. If you want to invest in graphene, you’ll need to find a different approach.
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Patents and CVD
So if exfoliation isn’t the path to mass graphene production, then what is?
The exact answer is actually still unclear, but it will most likely be a form of chemical vapor deposition (CVD) — a practice commonly used in the semiconductor industry to produce thin films of solid materials.
As we mentioned earlier, graphite is an allotrope of carbon, which means it’s a pure form of the element. By extension, that’s all graphite is made of as well, and as you may already be aware, carbon is the single most abundant element on earth.
One popular way of extracting carbon to grow graphene is to expose methane gas to copper sheets. Methane is one part carbon and four parts hydrogen. When the compound reacts with copper, these two elements break apart.
Now, there’s a bit more science to CVD than that, but the takeaway is that graphite is not required for graphene production.
Believe it or not, using deposition methods, it’s possible to make graphene out of virtually any material containing carbon — not just graphite. The American Chemical Society, for instance, devised a method of growing graphene on copper using a variety of carbon-containing elements including cookies, chocolate, grass, plastics, cockroach legs, and even dog feces.
Now, I hope you’ll pardon me in advance for being brash, but with no clear winner for mass production methods yet, it seems accurate to say that graphite is — both figuratively and literally speaking — about as sensible of an investment in graphene as buying a dog and storing its shit in the freezer.
As harsh as that might sound, it’s certainly true. If you happen to hold any stake in graphite miners as a proxy for graphene investing, the best advice I can give you is to sell ASAP.
Of course, that isn’t to say opportunities to invest in graphene don’t or won’t exist. It just means you’ll need to take a different route than looking for junior miners right now.
The reality is the real fortunes from the graphene revolution will come not from rare elements underground but rather from the United States Patent and Trademark Office.
Those who own the intellectual property for viable mass production will ultimately control the landscape, plain and simple. Better to dig through documents than dirt at this point.
Until next time,
Jason Stutman
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