The Australian mining company Syrah Resources on 23 December announced that it has entered into a binding agreement with Tesla under which the electric car and battery manufacturer will buy "Active Anode Material" produced out of graphite from Syrah's mine in Balama district, in the northern Mozambican province of Cabo Delgado.
The material will be produced at Syrah's factory in Vidalia, Louisiana, in the United States and sold to Tesla at a fixed price over a four year period. Tesla also has an option to offtake additional Active Anode Material from Vidalia subject to Syrah expanding its capacity beyond 10,000 tonnes per annum.
According to a statement from Syrah, "the agreement provides a compelling foundation to proceed with the initial expansion of Vidalia's production capacity and Syrah plans to make a final investment decision for construction of this expanded facility in January 2022".
The Balama mine covers 106 square kilometres and is reported to hold the largest graphite reserves ever discovered. It is an open cast mine and the company estimates the lifespan of the resource at more than fifty years.
In addition to supplying graphite to its factory in Louisiana, Syrah exports graphite from Mozambique to China which has an overwhelming dominance in the production of Active Anode Material.
The production facility at Vidalia is currently in its pilot and qualification phase but Syrah is planning to have the capacity to produce 10,000 tonnes per year of active anode material by 2023 or early 2024, with longer-term plans to produce up to 40,000 tonnes per year.
Active Anode Material is used in lithium-ion batteries for electric cars.