Syrah signs another ex-China offtake partner

Syrah Resources (ASX:SYR) has struck a long-term offtake deal with South Korea-based Posco Future M for natural graphite fines from the Balama Graphite Operations in Mozambique.

Under the six-year agreement, Posco will purchase up to 2,000 tonnes of graphite fines per month for the first year following the commissioning of Syrah’s Balama operations, and then between 2,000 and 5,000 tonnes for the remainder of the deal term. 

Posco will be able to decide how much it purchases in the 2,000-tonne to 5,000-tonne range with at least 6 months’ notice after the first year of the arrangement. 

Syrah will sell the graphite fines at a mutually negotiated price once a quarter and says the parties will reference independently reported price indices for natural graphite fines, with adjustments for product grade and volume. 

The offtake deal is an ‘important development’ in Syrah’s sales strategy to transition Balama natural graphite sales to a more geographically diversified customer base. Syrah says the Posco deal highlights its ‘unique’ position in natural graphite and active anode material (AAM) supply outside of China. 

Posco is looking to grow its natural graphite AAM production capability — primarily from processing facilities in South Korea — from roughly 74,000 tonnes per annum in 2023 to 154,000 tonnes per annum and 182,000 tonnes per annum in 2026 and 2030, respectively. 

The company supplies its products to ‘tier-one’ battery manufacturers around the world. 

Syrah’s deal with Posco comes alongside offtake arrangements already in place with Graphex Group (NYSE American: GRFX/HKSE:6128) and Westwater Resources (NYSE American: WWR).

Further, the company says it’s in talks with 7 other potential offtake partners outside of China as it targets 100,000 tonnes of natural graphite fines sales to AAM and battery markets from 2026 onwards.

Syrah says its first sales from Balama are slated for before the end of 2024. 

Images: Syrah Resources
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Written By Joshua Smith
Joshua Smith has years of experience in the media sector, having worked as a markets reporter, features writer, and editor since completing a Communications and Journalism degree and a Creative Writing degree. Josh is an avid board game fan and a self-professed coffee snob.