Mozambique: Funding of almost €60M for graphite operations – Lusa

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Mozambique: Funding of almost €60M for graphite operations – Lusa

3:12 CAT | 14 Mar 2024

File photo: Syrah Resources

Australian mining company Syrah announced on Wednesday that it has secured financing totalling $64.73 million (€59.2 million), for the graphite mine operations in Balama, northern Mozambique.

In a statement to investors, Syrah says that the operation consists of placing a rights offering to also finance the Vidalia project, based in the United States of America.

We will raise approx. A$98 million through institutional placement & pro rata entitlement offer. AustralianSuper commits to take up its full pro-rata entitlement, expected to increase its stake from ~17.8% to ~31.9%.
📰https://t.co/khHzzH6L5I & 📰https://t.co/Ph5hm0iZWq $SYR pic.twitter.com/K7hZAledzu

— Syrah Resources (@SyrahResources) March 13, 2024

The company explained that Australia’s largest shareholder and main pension fund, AustralianSuper, has agreed to convert bonds issued in June 2019 and December 2023 into new shares in the mining company.

In April 2023, Syrah produced 15,000 tonnes of graphite for electric car batteries, which it exports from Cabo Delgado, in northern Mozambique, having stopped production the following month due to international stocks.

The Australian mining company’s production in Cabo Delgado had risen to 41,000 tonnes of natural graphite in the first quarter of this year, compared to 35,000 tonnes in the previous quarter, above sales, which rose from 28,000 to 30,000 tonnes.

The Australian firm is also building Vidalia, a battery material factory in the United States, which will be fed with Mozambique’s ore, in this case with two tonnes shipped in April 2023.

“The proceeds from the capital raising” of this operation will be used as part of US financing for Syrah’s operation, namely to support the acceleration and progress of the Vidalia project.

Syrah announced in September that it expects to receive US funding of $150 million (€137 million) for its subsidiary Twigg, which operates Mozambique’s Balama graphite mine in Cabo Delgado.

In a statement to the markets, Syrah explained at the time that the conclusion of the 13-year financing operation – through the DFC, the US government’s financing and development agency – will make it possible to fund the capital requirements of local graphite operations, one of the world’s largest reserves of this raw material, used in electric car batteries.

The operation will also enable “feasibility studies for the development of Balama’s vanadium resource” and the “current and future expansion of the storage facility”, as well as “sustaining Balama’s operations”.

“DFC’s proposed loan for Balama is in line with DFC’s commitment to promote trade and investment agreements and partnerships between the US and Africa,” explains Syrah.

A note issued by the White House, consulted by Lusa, states that the financing aims to guarantee the implementation of supply chains in Mozambique, more specifically, “to finance investments in the company’s graphite mining and processing operation in Balama”.

“Pending Congressional notification, this investment will increase production and diversify the global supply chain for graphite, a critical mineral for a range of clean energy and advanced technology products. DFC’s support will also lead to job creation and investment in local infrastructure while ensuring high environmental and social standards that are essential for responsible mining,” reads the US government statement.

The note recalls that at the recent 2023 G20 Summit in New Delhi, India, US President Joe Biden and Indian Prime Minister Narendra Modi brought together a group of leaders to “accelerate investments to scale high-quality infrastructure projects and the development of economic corridors through the Partnership for Global Infrastructure and Investment”.

Source: Lusa