Australia's Syrah cuts Mozambique graphite output in 2Q

Australian graphite producer Syrah Resources has reduced natural graphite production at its Balama mine in Mozambique in April-June because of weak demand and higher than usual diesel costs during the quarter.

Syrah cut production by 65pc on the year to 2,000t because of weak ex-China demand for natural graphite fines and approximately 50pc higher diesel prices in Mozambique during the quarter on the back of the US-Iran war, the company said on 23 July. Output was also lower on the quarter by 90pc.

Its April-June output represented residual production from the previous quarter, with the next round of production deferred to the July-September quarter, the company said. The mine has capacity to quickly scale up production to meet new demand.

Syrah undertook planned maintenance during the quarter which will ensure reliable production throughout the rest of the year, the company said.

The company's sales rose by 983pc on the year to 7,000t as the company drew on existing inventory to service sales (see table). Sales were particularly low in the same quarter a year earlier due to civil unrest at the Balama mine, which disrupted access to the mine for six months until May 2025.

Mozambique policy uncertainty

The Mozambique parliament officially enacted a new mining law in early June.

This will increase mandatory government participation in mining projects from 5pc to 15pc and introduce more stringent regulations on domestic value addition and in-country processing, but the implementation of these changes and their impact on its Balama mine and downstream refining activities is still unclear, Syrah said.

The government currently owns 5pc of Balama through Twigg Exploration and Mining.

Syrah produced 150t of active anode material (AAM) at its 11,250 t/yr Vidalia facility in the US during the quarter for testing and quality validation as it engages with potential customers.

The company has signed a 8,000 t/yr offtake deal with US automaker Tesla covering 70pc of Vidalia's output.

The company will begin AAM sales from Vidalia by the end of this year, pending customer qualification. It has plans to expand the facility to 45,000 t/yr but has not outlined a financing timeline.

By Daniel Gage-Brown