Syrah Resources, the biggest ASX-listed natural graphite supplier, has a Mozambique mine built on the projected growth of EVs and a battery material site in the US set to be the first major integrated operation outside of China.
“The demand growth is such that complementary sources of supply to China will be required globally,” business development general manager Viren Hira said.
The company signed an offtake agreement with Tesla last year and is working on a timeframe to start supplying the market as Syrah plans to start production at its Louisiana site in the second half of 2023.
Hira said unlike lithium, graphite was yet to benefit from a heightened price environment and underinvestment slowed progress. “Graphite is a bit of an orphaned commodity. And that might be because the market structure and conditions have resulted in challenges securing financing,” he said. “It’s equally important to a battery as lithium, if not more.”
South Korean company POSCO spent $US7.5 million on a 15 per cent stake in Black Rock Mining last year, with the Australian miner preparing to supply graphite from its Tanzania operations.
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De Vries said the company planned to have mining and processing commencing in late 2023 and it could be the first project supported with international bank debt.
“It’s all been equity financed … the banks won’t stand there because the structure of the industry still has 100 per cent of the processing for anode going through China,” de Vries said.
“We need an influx of bank debt. We need an influx of equity here if we’re actually going to make this stuff available.”
Morgans analyst Max Vickerson said graphite was a “developing story” that markets remained cautious about after investors were disappointed when shares in some companies fell between 2016 and 2020. “There were people who got burnt last time around,” Vickerson said.
“At the moment the market is probably a little more balanced, it might just be that companies pulled the trigger on graphite projects too early.”
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