Syrah Resources (ASX: SYR) has declared commercial production at its high-quality Balama graphite operation in Mozambique.
It comes about one year after Balama transitioned to formal operations.
In an announcement to shareholders, Syrah said its board determined the criteria to achieve commercial production was met on 1 January.
Syrah managing director and chief executive office Shaun Verner said it was a key milestone that reflected improvements in production consistency and recovery.
“This milestone has been reached through coordinated effort across the entire Syrah team, particularly through the dedication of the Balama operations team,” he said.
“We continue to implement further operational improvements in ongoing ramp up to bring recoveries in line with our medium and longer-term targets.”
The company also released some results for the December 2018 quarter, with Balama achieving 33,000 tonnes of graphite production while full-year output tipped in at 104,000t, in line with expectations.
Average graphite recovery of 70% was achieved in the fourth quarter, up from 53% recorded in the third quarter.
Balama is being touted as the leading global producer of high-quality graphite, with production supplying both traditional industrial graphite markets and emerging technology markets.
The commercial success of Balama didn’t come without some initial troubles, with a fire breaking out at the operation last October, causing damage to the plant’s primary classifier.
Melbourne-based Syrah was founded by well-known mining magnate Tolga Kumova, however he decided to step down from his managing director role in early October 2016.
Graphite’s allure continues
Graphite is a soft form of pure carbon that is generally black in colour and found as crystal flake or a mass in the natural environment.
Earmarked as a critical mineral in the United States and the European Union, graphite is a paramount ingredient in numerous industry applications including the surging lithium-ion battery sector.
While graphite’s uptake in the lithium-ion battery is gaining momentum, its primary end-use remains the global steel industry.
According to analyst Benchmark, total natural graphite production was around 2.4 million tonnes in 2017. This production is anticipated to jump to 4Mtpa to meet rising steel sector and battery demand.
Africa is currently a hotbed of graphite exploration activity, as companies chase high-quality deposits to commercialise.
Mozambique, Tanzania and Namibia hold much of Africa’s graphite riches and there are a slew of ASX-listed companies pouring exploration dollars into the region.
Last month, Walkabout Resources (ASX: WKT) flagged the release of an amended definitive feasibility study for its flagship Lindi Jumbo asset in Tanzania for early 2019 after a 41% boost in the graphite project’s resource estimate.
Investors applauded the commercial milestone, with Syrah shares gaining 2.6% to $1.76.