Syrah gets nod on $150-mln US govt loan for anode grade graphite production

Australia-listed graphite miner Syrah Resources has received approval for a $150-million conditional loan commitment for its wholly owned subsidiary Twigg Exploration & Mining Ltd in Balama, Mozambique, the company announced on Monday September 11

The loan has been approved by the United States International Development Finance Corporation (DFC) board of directors, subject to the completion of due diligence, negotiation of terms and legal documents, DFC management approval and that of Syrah’s board.

If finalized, the loan will help fund graphite production at Twigg’s Balama projects in Mozambique, including the current and future expansion of Balama’s tailings storage facility, and working and sustaining capital for the Balama operations, Syrah said.

The investment is expected to increase production and diversify the global supply chain for graphite, a critical mineral for a range of clean energy and advanced technology products, according to a White House statement on the G20 Summit from September 9-10 in New Delhi, India.

China has been dominating the supply of graphite anode all along, from upstream flake fines to downstream completed anode. The US government loan indicates efforts from the public and private sectors to establish supply chains outside China to secure raw materials, according to a trader of graphite in China.

Syrah’s Balama graphite project has a total capacity of around 350,000 tonnes per year, accounting for a majority of the flake fines supply outside China.

In August, Syrah signed agreements with lithium battery manufacturer Samsung SDI, multinational purified spherical graphite producer Graphex Technologies, and US-based junior graphite anode producer Westwater Resources related to the supply of flake fines from Balama and anode materials from Syrah’s Vidalia facility in Louisiana, in the US.

Another graphite producer, NextSource, also signed a memorandum of understanding (MoU) with South Korean battery precursor producer Posco International at the start of September. The MoU envisages the supply of NextSource’s flake graphite and spherical graphite to Posco over a 10-year period.

Aside from ensuring upstream raw materials security via offtake agreements, graphite miners have made further efforts to extend the supply chain to downstream anode production.

Syrah has reported significant progress during the first half of 2023 in achieving its goal of becoming a vertically integrated natural graphite active anode supply alternative for US and European battery supply chain participants and original equipment manufacturer customers via the development of a large-scale active anode material (AAM) facility at Vidalia, the company said in its interim financial statement on Monday September 11.

The company received approximately $65 million from the US Department of Energy (DOE) to support the expansion of its AAM project in Vidalia in the first half of 2023, as part of a $102-million loan granted by the DOE in July last year.

The Vidalia project is expected to start production in December, with the aim of producing an initial 11,250 tonnes per year of graphite-based anode materials.

The natural flake graphite market has been experiencing a tough period in the past couple of months amid bearish demand.

Fastmarkets’ weekly price assessment for graphite flake 94% C, -100 mesh, fob China was $530-606 per tonne on Thursday September 7, widening downward by $20 per tonne from a week earlier.

Fastmarkets’ weekly price assessment for graphite spherical 99.95% C, 15 microns, fob China was $2,000-2,200 per tonne on the same day, unchanged week on week.

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