Syrah Resources (ASX:SYR) has signed a binding sales agreement with Qingdao Langruite Graphite for natural graphite from Syrah’s Balama project in Mozambique.

The agreement entails Syrah providing a minimum of 48,000 tonnes of natural graphite to Langruite in 2019, with the option to add an additional 12,000 tonnes. It includes the sale of both fine- and coarse-flake products that span a range of fixed carbon grades.

All other terms of the agreement have been kept confidential.

“Syrah continues to establish itself as a significant supplier of natural graphite into China. Our relationship with Langruite will enable further diversification of Balama graphite sales across a range of end uses and provides flexibility in product delivery,” said Managing Director and CEO Shaun Verner.

He added, “[w]e look forward to a successful relationship with Langruite.”

Based in Shandong, China, Langruite is a related entity of Qingdao Guangxing Electronic Materials, an active member of China’s graphite market that works with spherical graphite and refractory materials.

Syrah signed its first Balama sales deal in September 2017 with Jixi BTR Graphite Industrial, a subsidiary of Shenzhen BTR New Energy Materials, for 30,000 tonnes of graphite during the first year of production.

A few months later, Zhanjiang Juxin New Energy Materials signed on with Syrah for 20,000 tonnes of natural graphite from Balama.

This fall, Syrah received the last necessary green light for Balama when it had its mining agreement for the operation sanctioned by the Administrative Court of Mozambique. The step gave Syrah the ability to mine both graphite and vanadium at the operation with validity lasting through to 2038.

The company signed another sales agreement for Balama in November with Qingdao Taida-Huarun New Energy Technology, also based in Shandong, for 20,000 tonnes of graphite. While the company remained tight-lipped about the agreement’s terms, Syrah did say the graphite is to be received by August 31, 2019.

While production at Balama hit a snag in October after a fire in the processing plant’s primary classifier unit, the company still anticipates that the operation will see a Q4 production rate of 30,000 to 35,000 tonnes; Syrah has estimated a 30,000-tonne loss in output from the fire and subsequent operational halt.

Syrah’s share price closed Thursday (December 20) at AU$1.47, down 6.37 percent.

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Securities Disclosure: I, Olivia Da Silva, hold no direct investment interest in any company mentioned in this article.