Syrah Resources Boosts Production 34% as US Tariffs Shift Market Dynamics

Operational Momentum at Balama

Syrah Resources has delivered a notable increase in production at its Balama graphite mine, with output rising 34% in the December quarter to 34,000 tonnes. The operation maintained strong recovery rates of 76% and a high-grade product at 95%, underscoring the quality of its natural graphite. Sales volumes of 29,000 tonnes reflect a favourable sales mix, with 89% fine to coarse graphite, supporting the company’s revenue streams.

Financial Position and Market Context

The company closed the quarter with a robust cash balance of US$77 million, bolstered by a disbursement from the US Development Finance Corporation (DFC). Despite a cash outflow from operations of US$18 million, largely due to increased working capital requirements, Syrah remains well positioned financially to support ongoing operations and expansion plans.

Strategic Advantage from US Tariffs

Syrah’s Vidalia anode active material (AAM) facility in the US continues to progress through qualification with Tier 1 battery customers, a critical step for commercialisation. The company benefits from a complex landscape of US import tariffs on Chinese graphite AAM products, including antidumping and countervailing duties potentially exceeding 100%. These tariffs create a competitive advantage for Vidalia’s US-based production, aligning with US government policies favouring non-Chinese supply chains and supporting eligibility for 45X tax credits for battery manufacturers sourcing non-Prohibited Foreign Entity materials.

Downstream Expansion and Market Outlook

Syrah is advancing plans for further expansion of its Vidalia facility, targeting a significant increase in production capacity by 2029. This downstream integration is designed to capitalise on the growing demand for natural graphite in electric vehicle (EV) batteries, particularly outside China. The company’s strategic partnerships and offtake agreements with major players such as POSCO and Westwater underpin this growth trajectory. Meanwhile, global EV sales and battery manufacturing capacity continue to expand, reinforcing the long-term demand fundamentals for Syrah’s products.

Sustainability and Community Commitment

Syrah maintains a strong environmental, social, and governance (ESG) profile, with the Balama operation achieving leading certifications including IRMA 50, ISO 45001, ISO 14001, and ISO 9001. The company continues to invest in community development in Mozambique, with a new agreement committing US$5 million over five years to social initiatives and professional training programs, reflecting its commitment to sustainable and responsible mining practices.