Syrah Resources has signed a binding sales agreement with Qingdao Taida-Huarun New Energy Technology for graphite from its Balama project in Mozambique.
Syrah Resources (ASX:SYR) has signed a binding sales agreement with Qingdao Taida-Huarun New Energy Technology for graphite from the company’s Balama project in Mozambique.
The agreement, set to begin immediately, is for 20 kilotonnes (kt) of natural graphite and is to be received from Balama by August 31, 2019. All other terms of the agreement have been kept confidential.
“This contract is another demonstration of Syrah’s Balama graphite product penetration into China and the battery anode material market. It is also pleasing to see the significant volume of spot sales translating into this type of quality longer term commitment, as the sales book continues to evolve,” Syrah Managing Director and CEO Shaun Verner said in a statement.
“Syrah is establishing Balama product as a baseload for battery anode materials and other industrial specialty applications and we look forward to a successful relationship with Taida,” he added.
Qingdao is based in Shandong, China, and has a focus on research and development, along with the production of carbon materials like spherical graphite for battery anode materials.
While Balama saw first natural flake graphite production in November 2017, the project just had its mining agreement finalized by the Administrative Court of Mozambique in late September.
The agreement, made between the government of Mozambique and Syrah subsidiary and Balama operation holder Twigg Exploration and Mining, covers the mining of both graphite and vanadium at the operation, and is valid until 2038.
Production at the operation took a hit in early October after a fire broke out at the processing plant’s primary classifier unit. In late October, Syrah announced that a replacement had arrived on site and a return to full production remained on track.
On Wednesday (November 7), the day after Qingdao deal was announced, Syrah said that the classifier unit had been installed and commissioned ahead of schedule. Production has now resumed.
The company estimates that Balama will see a production loss of 30 kt during Q4 from the fire, with Q4’s revised production forecast being adjusted to 30 to 35 kt.
Syrah’s share price was at AU$2.03 at close of day Wednesday, up 4.91 percent.
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Securities Disclosure: I, Olivia Da Silva, hold no direct investment interest in any company mentioned in this article.