PERTH (miningweekly.com) – A feasibility study has estimated that the Balama graphite project, in Mozambique, would require a capital investment of some $138-million to deliver a 380 000 t/y operation.

Project owner Syrah Resources on Friday announced that based on the current maiden Joint Ore Reserves Committee-compliant reserve of 81-million tonnes, grading 16.2% graphite, the project was expected to have a mine life of about 40 years.

The feasibility study estimated that the project would have a net present value of $1.1-billion and an internal rate of return of 71%. Average cash operating costs have been estimated at $286/t free-on-board over the life of the mine.

During the first ten years of operation, during which time the mine was expected to produce at an average rate of 365 000 t/y graphite concentrate, the Balama project would deliver a free cash flow of $160-million a year.

“We are absolutely delighted with the results of this feasibility study, which confirm our long held view that Balama will shortly become the world’s premier graphite mine,” said Syrah MD Tolga Kumova.

He pointed out that metallurgical testing had also confirmed that Balama graphite would become a leading source of high-quality spherical graphite for lithium ion battery applications.

Kumova noted that a land access application had been lodged for the project, and was being reviewed by the Mozambique government.

In May this year, the Ministry of Land, Environment and Rural Development gave its blessing for the development of the Balama graphite project.

The environmental licence followed on from the grant of the water licence and a mining concession that was granted in December 2013, and which would last for a period of 25 years.

With the ramp-up of production scheduled to start some 18 months after the completion of financing, preconstruction work and early engineering activities were occurring to ensure a smooth transition into project development.

Financing discussions, meanwhile, were well advanced, Kumova said.

The Balama feasibility study did not consider the vanadium potential at the project, and Kumova noted that a scoping study on the potential recovery and production of vanadium had been completed. Syrah would conduct further vanadium technical studies during the construction and commissioning phase of the graphite project, with full feasibility studies expected after the successful commissioning of graphite production.