Name and Location
Balama West graphite project, Cabo Delgado, Mozambique.

Client
Syrah Resources.

Project Description
A scoping study on the Balama West project envisions the development of a 1.2-million-tonne-a-year openpit mine.

The operation will have an initial seven-year mine life and Syrah will likely be able to sell about 220 000 t of graphite in the first year of production.

The scoping study does not include any potential for vanadium credits, despite the presence of mineralisation in the region.

Net Present Value/Internal Return of Return
The project has post tax net present value at a 10% discounted rate of $330-million and an internal rate of return of 59%, with a payback period of 3.4 years once construction is completed.

Value
The project will cost $91.6-million to develop.

Duration
Not stated.

Latest Developments
The definitive feasibility study on the Balama West project is rapidly being finalised and is expected to be announced in early 2015. Initial feedback indicates a long-life project that is technically and financially robust.

The environmental report is expected to be approved in early 2015.

Binding offtake agreements totalling an estimated 120 000 t/y are being finalised. Syrah is confident that a successful outcome will be achieved. Trial recarburiser pellets and spherical graphite samples have been sent to Marubeni and discussions with major battery producers have started.

In March 2014, a memorandum of understanding (MoU) for an offtake agreement was signed with China Aluminium International Engineering Corporation Limited (Chalieco). Under the MoU, Chalieco will buy 80 000 t to 100 000 t of flake graphite and an amount of >98% vanadium oxide chemical powder or flake products to be determined.

Chalieco has started work on an economic feasibility study targeting a 25 000 t/y scenario, which is expected to be finalised in the first quarter of 2015. Trials have also started on the coating of Balama spherical graphite along with testwork on its electrochemical properties. These results will be presented to global battery producers once finalised.

Further, Syrah’s water licence application was approved by the regional water administration in November 2014.

Key Contracts and Suppliers
Snowden Mining Industry Consultants (scoping study), Mintek (metallurgy), Metallicon Process Consulting (process engineering and design), Environmental Business Strategists (environment), MSA Group (resource definition) and Ports of Africa (port and transport infrastructure).

On Budget and on Time?
Not stated.

Contact Details for Project Information
Syrah Resources MD Tolga Kumova, tel +61 3 9670 7264 or email t.kumova@syrahresources.com.au.
Snowden Mining Industry Consultants, tel +27 11 782 2379, fax +27 11 782 2396 or email snowden@snowden.co.za.
Mintek, tel +27 11 709 4111 or fax +27 11 793 2413.
Metallicon Process Consulting, tel +27 12 259 0792 or fax +27 86 688 3797.
Environmental Business Strategists, tel +27 11 888 6043, fax +27 86 673 3177, email info@envirobiz.co.za.
MSA Group, tel +27 11 880 4209, fax +27 11 880 2184 or email info@msagroupservices.com.
Ports of Africa, tel +27 11 772 1411.