Global graphite producer Syrah Resources anticipates a surge in demand for natural graphite from buyers outside China as the world’s largest graphite exporter implements stricter export controls, slated to commence on December 1. These controls will require export permits for certain graphite products, including spherical graphite used in electric vehicle (EV) batteries.
Syrah Resources, a supplier to Tesla, operates graphite mines in Mozambique at its Balama operations and is in the process of constructing a plant in Louisiana for active anode material (AAM) production for batteries. In May, it temporarily halted mining at Balama due to price pressure caused by oversupply.
With China’s impending export controls, automakers and battery material suppliers are compelled to expedite their search for alternative sources of graphite, a crucial component in EV batteries. Syrah Resources reported that, based on feedback from its customers and analysts, buyers are keen to stockpile graphite to mitigate the risk of supply disruptions ahead of the ban and in anticipation of China’s reduced natural graphite production during the winter season.
Syrah highlighted the potential consequences of any disruption or reduction in China’s export supply of anode precursors or AAM, emphasizing that it could impact battery production outside China. While uncertainties loom regarding the impact of these controls on Chinese supply, Syrah expects that it won’t significantly affect demand from China for its Mozambique project in the near term.
In a statement, the company stated, “Although the impacts of implementation are not yet known, the announced graphite export controls in China are increasing Government and private sector attention on the strategic importance of Syrah as a unique ex-China natural graphite and AAM supplier in the battery supply chain.”
These developments come as Australian government officials embark on visits to the United States to bolster cooperation on critical minerals.
Following the announcement of the export bans, Syrah Resources’ shares surged by 43% to A$0.95 a share, subsequently trading at $0.66 cents on Thursday. Furthermore, the U.S. International Development Finance Corporation (DFC) recently approved a loan of up to $150 million for Syrah’s Mozambique operations.
As the global EV industry grapples with supply chain challenges, Syrah Resources finds itself in a pivotal position, serving as a key player in ensuring a stable supply of natural graphite for the battery market.
Source: Mining Weekly
