Mozambique: Graphite production sees sharp decline in first nine months

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Mozambique: Graphite production sees sharp decline in first nine months

1:47 CAT | 25 Nov 2024

File photo: Proactive Investors

Graphite produced in Mozambique for the electric vehicle battery industry had reached only 11% of the target set for the entire year by September, falling 55% compared to the first nine months of 2023, according to official data.

According to a budget execution report consulted by Lusa on Monday, Mozambique produced from January to September only 34,899 tons of graphite in the first nine months, against a government target of 329,040 tons for the entire year. By comparison, in the first nine months of 2023, graphite production stood at 77,728 tons.

According to the document, this low performance is the result of the “paralysis” of the activities of GK Ancuabe graphite mine since 2023, “as well as the interruption of the activities of the company Twigg Mining and Exploration – a local subsidiary of the Australian mining company Syrah – due to the introduction of synthetic graphite into the international market, combined with labor problems in the company, culminating in the suspension of mining operations”.

In the whole of 2023, Mozambique produced 97,346 tons of graphite, compared to 165,932 tons in 2022 and 77,116 tons in 2021.

Syrah complained this month about the ongoing protests by a group of Mozambican farmers that are limiting access to the Mozambican graphite mine in Balama, claiming that the post-election protests in the country are delaying the outcome.

In a report to the markets dated November 11, Syrah explains that the issue at hand is protests in Balama, Cabo Delgado district, northern Mozambique, near the mine, by a “small contingent” of local farmers, with “historical farmland resettlement grievances” which remain unresolved, “conflated with unrelated issues”.

The problem was “hindering the movement of people, interrupting site access and currently preventing commencement of the next production campaign”, reads the information from Syrah.

It adds that after the announcement of the results of the general elections of October 9, widespread protests associated with the electoral process are “causing widespread disruptions throughout Mozambique”.

“Circumstances surrounding these protests appear to be impacting the responsiveness of Mozambique government authorities in resolving illegal action at Balama,” it adds.

Syrah also states that the Balama mine “is operating in campaign mode basis, and may temporarily [halt] production due to maintenance, inventory positions, and other planned or unplanned factors”, reporting that the company ” will require a campaign in December 2024 quarter to replenish inventories”.

“The Company continues to engage intensively with Mozambique Government authorities and stakeholders to ensure a permanent and positive resolution,” Syrah concludes.

The Balama graphite mine, in northern Mozambique, made its exporting debut this year, to an Indonesian battery manufacturer, which purchased 10,000 tons of ore, the Australian mining company Syrah announced in April.

According to previous information from Syrah, which owns that mine, this was the “first large-volume sale” of natural graphite from Balama to Indonesia under the ownership of BTR New Energy Materials, and the “first large-volume sale of natural graphite to a participant in the battery supply chain outside of China”.

The mining company also said that the company BTR New Materials Group is building a $478 million (€429 million) battery factory in Indonesia, “which is expected to start production in 2024”, and also expects new sales from that mine to the company.

The Australian company is also building a battery materials factory in Vidalia, in the United States of America, which will be supplied with Mozambican ore, in this case with an initial two tons shipped in April last year.

Source: Lusa