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Australian miner signs deal for its Moz graphite with Chinese manufacturer

22nd September 2017

By: Keith Campbell

Creamer Media Senior Deputy Editor

     

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Australian-domiciled, ASX-listed junior miner Syrah Resources has announced, in a release through the ASX, that it has entered a binding sales agreement for 30 000 t of graphite from the first year of production at its Balama project, in the Cabo Delgado province of Mozambique.

The contract is with Chinese company Jixi BTR Graphite Industrial, which is a 100%-owned subsidiary of lithium-ion battery anode materials developer and manufacturer Shenzhen BTR New Energy Minerals, based in Shenzhen (which is in Guangdong province, in the south of China, adjacent to Hong Kong).

This deal follows on from a nonbinding memorandum of understanding (MoU) signed between Syrah and BTR in March. The two companies will also continue to develop the other elements of this MoU, which includes provision for possible cooperation in the supply chain.

“This contract is a significant and material step forward for Syrah,” affirmed company MD and CEO Shaun Verner.

“The relationship with BTR will see Syrah’s high-quality graphite placed into the lithium-ion battery market. In confirming this binding sales agreement with the world’s largest battery anode manufacturer, Syrah will enter the leading geographic market for natural graphite with confidence and capitalise on the significant forecast growth in the electric vehicle and energy storage markets. With battery development receiving strong policy support from governments across the world and increasing consumer demand, Syrah’s Balama operation will form a baseload of high-quality natural graphite supply for major battery anode manufacturers globally. Syrah remains the only large-scale, fully funded natural graphite project entering production. We look forward to a long-term relationship with BTR.”

The Chinese group is the world’s largest manufacturer and technology developer in its sector. “BTR has been focusing on high-quality lithium-ion battery material research, development and production,” explained group chairperson He Xueqin.

“BTR is a truly integrated enterprise, from raw materials resources to battery material products, covering the whole industry chain of high-quality battery material production. “Continuous technical innovation, [together] with the stable long-term supply of raw materials, has always been BTR’s strength, enabling the company to maintain and realise its competitive edge and international global leadership in the lithium-ion battery material industry. “Through the cooperation with Syrah, we can also source consistent raw material supply overseas, in addition to our secured raw material supply in China. We look forward to all-round and global cooperation with Syrah.”

The signing of the contract with BTR followed only days after Mozambique’s Council of Ministers (Cabinet) announced that it had approved the mining agreement with Syrah (technically, with the miner’s wholly owned Mozambique subsidiary, Twigg Exploration & Mining Limitada) for the extraction of graphite at Balama.

The company has described the graphite from Balama as being of “exceptionally high quality” and has divided the property into two sections, Balama East and Balama West, which include three so-far-identified high-grade zones.

In its interim report for the half-year ended June 30, 2017, Syrah reported that construction activities at Balama had been 90% complete by June 30, but that later delays in completing the processing plant had increased the construction costs from $200-million to $205-million.

All essential equipment for mining, infrastructure, services and the laboratories was in place. A run-of-mine pad had been stocked for commissioning and a water pipeline was being laid.

The company expected production ramp-up to be between 140 000 t and 160 000 t of flake graphite concentrate during the first year of production, rising to between 250 000 t and 300 000 t in the second year – the exact amount being dependent on world market conditions.

The miner had previously confirmed sales agreements with Hiller Carbon, of the US (signed in January 2016), and Japan’s Marubeni Corporation (signed in June 2016 and covering Japan and Korea).

Edited by Martin Zhuwakinyu
Creamer Media Senior Deputy Editor

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