China lockdowns helping Mozambique graphite, Syrah Resources says

Mitsubishi Chemical

21/07/2022 10:54

July 21 (Reuters) - Australia's Syrah Resources  SYR.AX  is
seeing strong demand for the graphite it mines in Mozambique,
thanks in part to China's COVID-19 lockdowns which are impacting
production there, the company's chief executive said on
Thursday.
    Syrah operates the Balama graphite mine in Mozambique's Cabo
Delgado province and is one of the world's biggest producers of
graphite, a key component of lithium-ion batteries used in
electric vehicles.
    Mined graphite production from top supplier China has been
impacted by COVID related logistics interruptions, Syrah chief
executive Shaun Verner said in a quarterly update.
    "Chinese natural graphite production constraints are
evident, with higher Chinese natural graphite imports required
to satisfy demand, and Syrah's forward sales orders indicate
customer concern regarding Chinese natural graphite production
availability and market balance," he said.
    Verner said Syrah has a forward sales order book of about
90,000 tonnes of natural graphite. The company produced 44,000
tonnes of graphite in the quarter to June and expects to raise
monthly output above 15,000 tonnes.
    The company said the weighted average sales price of natural
graphite sales for the quarter was US$662 per tonne (CIF), up
16% from $573 in the previous quarter.
    But it noted higher diesel and shipping costs were squeezing
margins. The company's shares have fallen around 26% so far this
year after strong gains in 2020 and 2021.
    During the quarter, Syrah signed a memorandum of
understanding with Japan's Mitsubishi Chemical Corporation to
collaborate on the development of battery materials.
    This follows Syrah's December 2021 offtake agreement with
Tesla  TSLA.O  for the supply of 8,000 tonnes of natural
graphite active anode material per year from its Vidalia
facility in the United States.
    Syrah suspended logistics and personnel movements at its
Balama mine for a week in June as a precautionary measure due to
insurgent activity in the Ancuabe region of Cabo Delgado
province. The company said its operations, employees and
contractors were not impacted by the incidents, which took place
more than 200 km (124 miles) from the mine.  urn:newsml:reuters.com:*:nL4N2Y40FK
    On Wednesday, gem producer Gemfields  GMLJ.J   GEMGE.L 
reported an attack near its ruby mine in Cabo Delgado's
Montepuez district, but said operations had not been halted.
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 (Reporting by Nelson Banya; Editing by Helen Reid and Kim
Coghill)
 ((Nelson.Banya@thomsonreuters.com;))