London — The Australian mining company Syrah Resources on Monday announced that it is to receive a loan of 150 million US dollars to fund the development of its Balama graphite project in Balama district, in the northern Mozambican province of Cabo Delgado.
The loan is to come from the United States International Development Finance Corporation (DFC), which is the development agency of the US federal government. It will be made to the company's wholly-owned subsidiary, Twigg Exploration and Mining Ltd.
In a statement to the Australian Securities Exchange, the company notes that, if completed, the loan will cover some of the capital costs for the Balama project and is "aligned with the Biden - Harris Administration's commitment to support development in Africa'.
Syrah points out that this will be the first time DFC has made a loan to a graphite project "demonstrating the importance of Balama to bolstering US supply chain security for the supply of critical minerals'.
A statement from the White House on Saturday pointed out that "this investment will increase production and diversify the global supply chain for graphite which is a critical mineral for a range of clean energy and advanced technology products'.
It added, "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'.
The funds will be used for the expansion of Balama's tailings storage facility, working and sustaining capital for Balama's operations, and feasibility studies for the development of Balama's vanadium resource.
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According to Syrah's chief executive, Shaun Verner, the approval of the loan "demonstrates the importance of Balama, which is the largest integrated graphite mining and processing operation globally, to the critical minerals strategy of the US'.
He adds, "Together with the US Department of Energy loan for the expansion of Syrah's downstream business, DFC loan funding will position Syrah as a strategic partner in bolstering supply chain security for critical minerals required for the electric vehicle and energy transition in the US'.
The loan of up to 150 million US dollars has a term of up to 13 years with interest fixed at the applicable long-dated US Treasury rates plus a margin. The loan can only take place after the completion of due diligence, negotiation of detailed terms and legal documentation, DFC management approval, and Syrah and Twigg Board approvals.
The Balama graphite mine covers 106 square kilometres and is reported to hold the largest graphite reserves ever discovered. It is an open-cast mine and Syrah estimates the lifespan of the resource at more than fifty years. The mine was officially inaugurated by Mozambican President Filipe Nyusi in April 2018 although graphite mining began in November 2017.
Graphite is a highly valued form of carbon due to its properties as a conductor of electricity. It is used in batteries and fuel cells and is the basis for the "miracle material' graphene, which is the strongest material ever measured, with vast potential for use in the electronics industries.
