Syrah Resources Restarts Balama Graphite Production, Eyes Big Q3 Shipments

Restarting Operations Amid Challenges

Syrah Resources Limited (ASX, SYR) has officially recommenced natural graphite production at its flagship Balama Graphite Operation in Mozambique. This follows the restoration of site access in May 2025, enabling the company to remobilise its workforce, conduct inspections, and carry out necessary maintenance to prepare for renewed operations.

The Balama mine, one of the world's largest graphite producers, had faced operational disruptions that led to a force majeure declaration late last year. While this declaration remains active, Syrah is cautiously optimistic about ramping up production in a campaign mode to rebuild inventory levels ahead of anticipated shipments.

Strategic Focus on Ex-China Markets

Syrah is targeting significant demand for its natural graphite products outside China, where supply disruptions have tightened availability. The company plans to execute large volume breakbulk shipments to ex-China destinations as early as the September 2025 quarter, contingent on sufficient inventory build-up. This strategy aims to accelerate product deliveries and bring forward cash flow, positioning Syrah to capitalise on shifting global supply dynamics.

However, the company remains prudent, noting that ongoing market demand will dictate the continuation of campaign-style operations rather than a full return to continuous production. This approach allows flexibility amid uncertain geopolitical and operational conditions in Mozambique.

Navigating Local Relations and Risks

Syrah continues to engage proactively with the Mozambique National Government, provincial authorities in Cabo Delgado, and local community leaders. A key focus remains on resolving settlement processes related to resettled farmers, a sensitive issue that has impacted the operating environment. Maintaining good relations is critical to ensuring the free movement of goods and personnel essential for ongoing operations.

Despite these efforts, the force majeure declaration underscores lingering uncertainties. The company is monitoring the situation closely and will review the operating environment as shipments resume. Investors will be watching for updates on the status of this declaration and any potential impact on production continuity.

Looking Ahead

Syrah’s recommencement of production at Balama marks a significant milestone after a period of disruption. The company’s ability to rebuild inventory and execute large shipments in the near term could strengthen its position in the global graphite market, especially as demand for battery materials continues to grow. Yet, the balance between operational ramp-up and geopolitical risk remains delicate.