Mar. 5, 2021 - Syrah Resources has given more details on its restart plans for the Mozambican Balama project. It plans to return to production levels of 15kt per month graphite concentrate, with a more flexible approach to production depending on market conditions. Verner was commenting on the company’s recent announcement to bring the mine back into production, ramping up output over the next two to three months. He noted that, at 15ktpm, the project “would see a positive cash flow operational position at that level”.
The project was previously closed in March 2020 as a result of the impact of COVID-19 but the plant was kept in temporary suspension rather than put on care and maintenance, and can open up again once restaffing takes place.
As Syrah Resources is such a large player in the graphite market, the industry has been watching keenly for details of the restart at Balama. In 2019, the company reached 152kt of flake graphite production, accounting for more than 40% of ex-China production and around 15% of global production. During this initial ramp-up, the large increase in flake graphite supply to the market had a negative impact on global graphite prices.
Production at Balama was reduced from 15ktpm to around 5ktpm in Q4 2019 because of a weaker EV/battery market, before declining further in Q1 2020 due to COVID-19. Strong EV recovery seen in China since H2 2020 is once again driving a rising demand for graphite, with significant opportunities for battery-grade suppliers both inside and outside of China.
Balama concentrate has previously fed into the Chinese supply chain, with spherical graphite processing from flake concentrate, and anode material manufacture taking place in China. Syrah Resources is now looking to feed its own downstream facilities under development in the USA.
Meanwhile, China’s focus continues to be on downstream production, with a greater proportion of concentrate supply coming from imports rather than domestic producers. While Balama has previously fed into this trend, exporting mainly to China, Madagascan shipments to China have also increased, and Africa is likely to play a larger part in the raw material graphite supply in the years to come.
Source from: Roskill