Syrah Resources remobilises team to Balama graphite operation after site access restored

Syrah Resources (ASX: SYR) has remobilised its maintenance and inspection teams to the Balama graphite operation in Mozambique following restoration of site access this month.

The project was temporarily closed in December after subsidiary Twigg Exploration and Mining declared a force majeure event, triggered by nationwide protests and widespread disruptions at several mining operations due to the federal election.

Syrah’s ability to conduct operations at Balama had been impeded from late September 2024 by a series of protests at the mine site involving a small group of farmers with historical farmland resettlement complaints.

Re-start of operations

Syrah’s camp, mining services, mobile equipment and power contractors returned to site this week to complete inspections and prepare for the re-start of operations.

The company has so far identified no significant issues with the Ativa mine site, the plant and equipment, the tailings storage facility or associated infrastructure.

Syrah said it would finalise its inspection and preparation of the plant over the coming weeks and that it would need to conduct some minor maintenance during the re-start of each section due to the duration of the closure.

Graphite production

Syrah is targeting the re-start of natural graphite production during the June quarter and anticipates product shipments will follow soon after.

The company has reported latent demand from customers due to the supply disruption in the ex-China natural graphite market and plans to prioritise break-bulk shipments to shorten delivery timeframes and bring forward cash receipts.

Subject to market demand, the company expects to continue operating in campaign mode to maximise productivity and efficiency.

Balama has a run-of-mine inventory totalling approximately 400,000 tonnes of graphite ore, which the company expects will support at least three months of plant operations.

Settlement processes

Syrah is working with Mozambique’s national government, Cabo Delgado provincial authorities and community leaders to progress settlement processes arising from the temporary closure.

The company is keen to ensure ongoing support for the free movement of goods and people to and from the project site.

The force majeure declaration remains in force, pending the resumption of production and shipments and a further review of the operating environment.

Deferred repayment

The US International Development Finance Corporation (IDFC) has agreed to defer Syrah’s first half-yearly interest payment under the terms of the $227 million loan it granted the company in October.

Syrah is applying the loan to working and operational capital, expansion of the project’s tailings storage facility and feasibility studies for the development of Balama’s vanadium resource.

In light of the unforeseen closure and its impact on the Balama operation, the IDFC has now deferred the interest payment due this month.