Mozambique: Mining Co. decision to stop graphite production may hit revenues – National Director of Geology and Mines

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Mozambique: Mining Co. decision to stop graphite production may hit revenues – National Director of Geology and Mines

11:06 CAT | 24 Aug 2023

FILE - For illustration purposes only. [File photo: Syrah Resources]

Mozambique’ ministry of mineral resources and energy acknowledged on Wednesday that the decision by the Australian mining company Syrah to suspend graphite production in the country jeopardises the quantity and revenue targets that the state had projected.

The Australian mining company Syrah announced on 18 July that it had produced 15,000 tonnes of graphite for electric car batteries in April, which it exports from the district of Balama, in Cabo Delgado province, northern Mozambique, but stopped production the following month due to stocks and prices on international markets.

“Operations at the Balama [Nacala/Pemba] plant were interrupted, resulting in no production in May and June 2023, due to volatility in the Chinese anode market and the good availability of stock of finished products,” said the second quarter activity report, released by Syrah and in which it estimates costs of $4 million (€3.5 million) for each month that unit is inoperative.

READ: Mozambique: Syrah pauses operations in Balama as Chinese demand falls

Speaking to Lusa, Mozambique’s National Director of Geology and Mines, Cândido Rangeiro, pointed out that the measure could jeopardise this year’s graphite production projections and the revenue generated by this ore for the state.

“We are saddened by this because we actually had projections for graphite production, and this target will probably not be reached,” Rangeiro said.

Without specifying figures, he said that the impact could be “considerable”, bearing in mind that Syrah is the largest graphite producer in Mozambique, ahead of GK, which exploits this resource in the Ancuabe district, also in Cabo Delgado.

“This company [GK] has not told us of any stoppage, perhaps because it produces for a parent company that is in Germany,” and has not instructed its subsidiary in Mozambique about any decision regarding its operation in the north, he added.

Welcoming the fact that Syrah’s decision had no impact on jobs, the national director of Geology and Mining pointed out that the dynamics of the international raw materials market are characterised by fluctuations in demand and supply.

“Today we are facing this situation, and tomorrow I believe it will change,” he emphasised.

The Balama mine began commercial production four years ago and was in the spotlight in December when Syrah announced an agreement with electric vehicle multinational Tesla, which intends to use graphite from the mine, described as one of the largest deposits of this type of “quality” ore in the world by the Australian company.

Source: Lusa