London, 19 Jul (AIM) – The Australian mining company Syrah Resources on Tuesday announced that in May and June it paused production of graphite at its mine in Balama district, in the northern Mozambican province of Cabo Delgado due to volatile Chinese anode market conditions and high inventories.
According to the company’s quarterly announcement to the Australian Stock Exchange, production will restart when new sales orders are agreed allowing for the production of at least 10 kilotonnes per month at prices above operating production costs.
The company adds that robust global electric vehicle production and sales growth is expected to result in high demand for locally processed Active Anode Material in North America, and is “ultimately expected to require significantly higher imported natural graphite into China and emerging anode supply hubs”. However, Syrah warns that “the short-term volatility of China customer demand remains challenging”.
As a result of the production pause, Syrah mined just 15 kilotonnes of graphite in the second quarter of 2023 compared with 41 kilotonnes in the first quarter.
Syrah is also working on signing a second binding offtake agreement with Tesla Inc, the US-based multinational company that manufactures electric cars and battery storage.
It is also progressing with the construction of its automotive battery component plant in Vidalia, in the United States. In the fourth quarter of 2023 the factory will begin producing up to 11.25 kilotonnes per annum of Active Anode Material. It has carried out a feasibility study on expanding the factory to 45 kilotonnes per annum which “confirms the project is technically viable, financially robust and expected to generate significant value for Syrah”. The Final Investment Decision for this expansion is expected to take place later this year.
The Balama graphite mine covers 106 square kilometres and is reported to hold the largest graphite reserves ever discovered. It is an open-cast mine and Syrah estimates the lifespan of the resource at more than fifty years. The mine was officially inaugurated by Mozambican President Filipe Nyusi in April 2018 although graphite mining began in November 2017.
Graphite is a highly valued form of carbon due to its properties as a conductor of electricity. It is used in batteries and fuel cells and is the basis for the “miracle material” graphene, which is the strongest material ever measured, with vast potential for use in the electronics industries.
(AIM)
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