Not many people will have heard of graphene as it has no current applications and can’t be bought and sold as it is expensive and rare. The entire world production last year was one tonne and it was only discovered (in Manchester) in 2004. It may seem strange, then, that when the main producer of graphene floated on the stock market recently, the shares went up by 200% in three days, an almost unprecedented rise.
So, what is graphene?
Graphene is a very odd material. Nothing can be two dimensional – everything must have length, width and depth; even a line on a piece of paper has that, even though two of those dimensions may be very small. Graphene is rather like that – the third dimension (thickness) is infinitesimally small by any normal parameters, being a single carbon atom thick. Its discovery earned its discoverer a Nobel Prize in Physics for creating such a flat form of carbon, the properties of which originate in quantum physics. This is understandable by a handful of people, and yet graphene has such potential that EU and UK grants of substantial size have been awarded to the recently floated AGM (Applied Graphene Materials), currently the only commercial producer in the world.
What does it do?
The easy answer to that question is currently – nothing. The potential is huge, though, and that is why the shares rose so quickly and why there is such a buzz around the graphene production market. At the moment, it is believed that graphene will make super-efficient solar cells; unbreakable membranes for touchscreen devices; ultra-efficient wireless antennae; devices to make seawater drinkable by filtering at the molecular level and also will replace existing battery technology. The real sci-fi possibility is that eventually, graphene will be able to connect artificial devices to our neurons, allowing our brain to interact with machines. Of course, the list of potential uses is limited to our knowledge in other fields. It may well turn out that graphene will have more and more uses as our technical progress gains further ground.
Early market indications
AGM has only been on the market for a short while, coming onto the market at 155p. In less than three days it closed at 471p, showing a three day gain of 230%. Because at the moment buying into the graphene market means owning shares in AGM, the stock is likely to continue to do well. Creating a commercial venture to produce this really special material is not something that can be achieved overnight, so there is unlikely to be any competition for years to come. Currently, research and development laboratories are taking up the entire annual production of graphene, partly to find new uses for it, partly to find ways of upping production. The EU has announced a 1 billion euro funding plan to help look into commercial applications. The UK, bearing in mind that graphene was discovered in Manchester, has also added funding of £60m. Korea and Singapore are supporting graphene programmes in their own sector.
Why is AGM important?
Because AGM has the current capacity to produce enough graphene to satisfy the needs of commercial research labs, the hope is that when the research comes up with an application that is commercially viable and which will have enough retail or other appeal, then AGM will become the bulk supplier. Other companies will have to work without such funding as is already in place for AGM and so they will lag behind for years, if not permanently. Investors who have got in on the ground floor with AGM are likely to continue to do well as demand increases.
Is graphene a flash in the pan?
Although its discovery took a leap of quantum physics faith, the product is real enough and, at least in theory, its applications are many. The thought of something one atom thick is hard to get to terms with as there is nothing like it currently available and although most people think of carbon as being black at this degree of thinness it is in fact virtually invisible. Its uses are likely to be in industry although of course the battery technology possibilities are very exciting. At the moment, the main weight in any device comes from the battery – with battery technology as it is at the moment, reduction in weight means reduction in running time and so the possibility of changing the basic technology is hugely exciting. With every manufacturer of communications and media devices aiming for small size, thinness and light weight, the incorporation of graphene into the structure and working system of anything designed to be handheld is bound to be an exciting development, sought after by all serious producers.