ASX-listed Syrah Resources’ Balama graphite operation in Mozambique remained suspended for the third consecutive quarter, with the company citing continued protest action and lack of government intervention as key barriers to resuming production.

The prolonged shutdown, driven initially by farmland resettlement grievances and later entangled in broader election-related unrest, has prevented Syrah from accessing the site and restarting operations. As a result, the company has not produced any graphite at Balama since mid-2024, with inventories now depleted and sales on hold until production resumes.

“Production is required to replenish depleted inventory positions for sales to recommence,” the company said in its March quarterly update on Tuesday.

During the March quarter, Syrah sold only 1 300 t of graphite, compared with 8 700 t in the December quarter and 20 100 t in the March 2024 quarter.

Balama’s C1 fixed costs remain about $3-million a month on a free-on-board basis, though temporary cost-saving measures have been implemented.

Syrah declared force majeure under its Balama Mining Agreement in 2024, a status that remains in effect.

Efforts by the company, in partnership with Mozambique authorities, have led to a resolution and signed agreement with the original group of resettled farmers. However, Syrah said a small group of individuals with “no legitimate reason nor claim” continued to block access to the site, and government authorities had not acted to enforce the company’s right of access under the mining agreement.

Despite obtaining a final court order in March confirming a provisional injunction against the protestors, enforcement has stalled. “It is uncertain whether the injunction will be administered by District authorities and if it will be effective,” Syrah said. The company filed an application this month to make the injunction permanent.

The protest and operational halt have also affected Syrah’s ability to continue social development initiatives in the region. Still, the company affirmed that its “commitment to sustainability, community and governance remains paramount”.

The delay in resolving the situation has been exacerbated by wider civil disruptions and the late formation of Mozambique’s new government in January 2025.

Syrah did not provide guidance on when production at Balama might restart.

The mine, one of the world’s largest sources of natural graphite, is a key asset for the company’s integrated strategy with its downstream active anode material (AAM) facility in Louisiana, US.

Syrah reported that the Vidalia AAM sales were expected to start this year, with the timing dependent on qualification progress, US government policy clarification, and competing tariffed volumes of Chinese AAM supply to North America.  

The progression of Vidalia’s expansion to a 45 000 t/y AAM to a final investment decision is awaiting sales and financing commitments. Syrah has been awarded a $165-million Section 48C tax credit for the expansion project.

The company ended the quarter with cash balance of $66-million, including restricted cash of $44-million of which $9-million is available to fund Balama operating and capital costs and $11-million is available to fund Vidalia operating and capital costs.