Name of the Project
Balama graphite project.

Location
Cabo Delgado, Mozambique.

Project Owner/s
Natural graphite and battery anode company Syrah Resources.

Project Description
Balama is one of the highest-grade large-flake deposits globally. The project has mineral reserves of 108-million tonnes grading 16% total graphitic carbon (TGC) and mineral resources of 1.42-billion tonnes grading 10% TGC.

The project will be a high-grade, openpit operation using conventional mining methods with an extremely low stripping ratio. Operations will start with free-dig mining within the high-grade pits of Balama West using conventional truck-and-shovel mining. Operations will shift to the pits in Balama East thereafter.

The processing plant will have a feed rate of two-million tonnes a year using conventional processes, including crushing and screening, grinding, flotation, filtration and drying, as well as classification, screening and bagging.

Graphite concentrate will be transported using a sealed highway south-east of the project and shipped at the Port of Nacala, about 490 km away.

The mine is expected to produce an average of 365 000 t/y of graphite concentrate during its first ten years of production, and has a 50-year mine life.

The mine’s production will be sold to traditional industrial graphite markets and emerging technology markets.

Syrah also intends to pursue its downstream strategy, which involves further processing of flake graphite from Balama into spherical graphite at a plant in Louisiana, in the US. Spherical graphite is a high-margin, value-added product that is currently in significant demand, owing to its use in lithium-ion batteries for electric vehicle and energy-storage applications.

Potential Job Creation
The labour contingent increased to 499 staff in the quarter ended June 2021, excluding contractors.

Net Present Value/Internal Rate of Return
Based on the assumptions used in the feasibility study dated May 2015, the  project has a post-tax net present value, at a 10% discount rate, of $1.1-billion and an internal rate of return of 71%, with a payback period of less than two years from the start of commercial production.

Capital Expenditure
Not stated.

Planned Start/End Date
Not stated.

Latest Developments
Syrah Resources has signed a multiyear binding conditional offtake agreement with Canada’s NextSource Materials for the supply of natural graphite fines from its Balama operation.
The agreement, announced on March 2, provides for at least 34 000 t, and up to about 68 000 t, of graphite fines over a seven-year term starting no earlier than June 1, 2026, subject to certain conditions. The product will be delivered to Abu Dhabi, in the UAE.

Syrah has said the deal reinforces the strategic importance of the Balama operations as a large-scale supplier of high-quality natural graphite outside China, particularly to the emerging ex-China anode and battery supply chain.

Pricing under the agreement will be determined quarterly as a premium to an independently reported price index for natural graphite fines, with adjustments for product grade and shipping costs. The material to be supplied is specified as -100 mesh at 94% carbon or above.

The offtake is conditional on the start of commercial production at NextSource’s proposed anode material facility in Abu Dhabi, and on approvals from NextSource and its downstream customers to use Balama graphite. If the conditions are not met or waived by December 31, 2026, Syrah may terminate the agreement, while NextSource has termination rights if they are not met by December 31, 2027.

NextSource is advancing plans for a large-scale anode material facility in Abu Dhabi to supply a Japanese downstream customer. The company has secured a property and existing building, executed an offtake agreement with its Japanese customer and finalised term sheets for strategic funding as it advances towards a final investment decision on initial commercial capacity.

Key Contracts, Suppliers and Consultants
CPC Engineering (detailed engineering and design).

Contact Details for Project Information
Syrah Resources GM – investor relations John Knowles, tel +61 419 893 491 or email ljknowles@optusnet.com.au.