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Balama graphite project, Mozambique – update

Image of Balama process plant

4th February 2022

By: Sheila Barradas

Creamer Media Research Coordinator & Senior Deputy Editor

     

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Name of the Project
Balama graphite project.

Location
Cabo Delgado, Mozambique.

Project Owner/s
Syrah Resources.

Project Description
Balama is one of the highest-grade, large-flake deposits globally. The project has mineral reserves of 108-million tonnes grading 16% total graphitic carbon (TGC) and mineral resources of 1.42-billion tonnes grading 10% TGC.

The project will be a high-grade, openpit operation using conventional mining methods with an extremely low stripping ratio. Operations will start with free-dig mining within the high-grade pits of Balama West using conventional truck-and-shovel mining. Operations will shift to the pits in Balama East thereafter.

The processing plant will have a feed rate of two-million tonnes a year using conventional processes, including crushing and screening, grinding, flotation, filtration and drying, as well as classification, screening and bagging.

Graphite concentrate will be transported using a sealed highway south-east of the project and shipped at the Port of Nacala, about 490 km away.

The mine is expected to produce an average of 365 000 t/y of graphite concentrate during its first ten years of production. Balama has a 50-year mine life.

The mine’s production will be sold to traditional industrial graphite markets and emerging technology markets.

Syrah also intends to pursue its downstream strategy, which involves further processing of flake graphite from Balama into spherical graphite at a plant in Louisiana, in the US. Spherical graphite is a high-margin, value-added product that is currently in significant demand, owing to its use in lithium-ion batteries for electric vehicle and energy-storage applications.

Potential Job Creation
The labour contingent increased to 499 staff in the quarter ended June 2021, excluding contractors.

Net Present Value/Internal Rate of Return
Based on the assumptions used in the feasibility study dated May 2015, the Balama project has a post-tax net present value, at a 10% discount rate, of $1.1-billion and an internal rate of return of 71%, with a payback period of less than two years from the start of commercial production.

Capital Expenditure
Not stated.

Planned Start/End Date
Not stated.

Latest Developments
Syrah Resources has reported a tough quarter at its Balama operation, with production constrained by product inventory at its operations.

The Balama graphite operation produced 13 000 t of natural graphite for the three months to December, down from the 25 000 t produced in the previous quarter. Syrah told shareholders that production had been constrained by maximum finished product inventory positions at Balama and Nacala, as well as the ongoing disruptions in the global container shipping market.

Consequently, the company was unable to match product sales to increasingly strong underlying customer demand.

Graphite sales for the quarter reached 19 000 t, up from the 18 000 t sold in the September quarter, with Syrah noting that all 20 000 t of finished product inventory had been contracted to customers.

Additional shipping options are expected to become available from the March quarter, which will likely result in production rates of more than 15 000 t/m, and lower unit costs at Balama, Syrah has said.

The company is also advancing a competitive tender process for contract mining services at Balama to lower mining costs, while a solar and battery project at the mine is also progressing.

Key Contracts, Suppliers and Consultants
CPC Engineering (detailed engineering and design).

Contact Details for Project Information
Syrah Resources GM – investor relations John Knowles, tel +61 419 893 491 or email ljknowles@optusnet.com.au.

Edited by Creamer Media Reporter

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