Tesla drops threat to scrap graphite supply deal with Australia's Syrah Resources
Australia's Syrah Resources confirmed on Monday that electric vehicle maker Tesla has withdrawn a notice of intent to end their graphite supply deal over an alleged quality default, accepting the miner is now producing conforming samples.
Under its 2021 contract with Elon Musk-led Tesla, Syrah aimed to supply 8 000 t of graphite anode materials over a four-year period from its Vidalia plant in Louisiana.
Shares of Syrah rose as much as 41.4% to A$0.140, hitting their highest since March 24 and on track for their best session since October 23, 2023. The broader ASX200 benchmark stock index was down 0.4% in early trading.
Risks remain, especially if Syrah fails to achieve the final qualification, said Craig Sidney, a senior investment adviser at Shaw and Partners.
"Today's move is positive off a very low base and volumes are very high as expected," said Sidney, while referring to Syrah shares.
Volatility is expected to continue in the short term as some traders exit the stock and there may be some tax loss selling into the end of the financial year, he said.
Tesla issued a default notice in July 2025, citing conformity issues with the active anode material (AAM) samples delivered from the Vidalia facility, the only vertically integrated, large-scale producer of anode materials outside China.
In a statement to the ASX on Monday, Syrah said Tesla now accepts that the miner has demonstrated it is producing conforming AAM samples and has made sufficient progress.
Syrah said Tesla has reserved its existing right to terminate the supply agreement if Vidalia AAM does not meet final qualification.
In March, Tesla and Syrah agreed to extend for the fourth time the deadline to resolve the alleged default under their graphite supply agreement to June 1.
Syrah operates the Balama Graphite Operation, the world's largest integrated natural graphite mine and processing facility, in Mozambique.
Article Enquiry
Email Article
Save Article
Feedback
To advertise email advertising@creamermedia.co.za or click here
Press Office
Announcements
What's On
Subscribe to improve your user experience...
Option 1 (equivalent of R125 a month):
Receive a weekly copy of Creamer Media's Engineering News & Mining Weekly magazine
(print copy for those in South Africa and e-magazine for those outside of South Africa)
Receive daily email newsletters
Access to full search results
Access archive of magazine back copies
Access to Projects in Progress
Access to ONE Research Report of your choice in PDF format
Option 2 (equivalent of R375 a month):
All benefits from Option 1
PLUS
Access to Creamer Media's Research Channel Africa for ALL Research Reports, in PDF format, on various industrial and mining sectors
including Electricity; Water; Energy Transition; Hydrogen; Roads, Rail and Ports; Coal; Gold; Platinum; Battery Metals; etc.
Already a subscriber?
Forgotten your password?
Receive weekly copy of Creamer Media's Engineering News & Mining Weekly magazine (print copy for those in South Africa and e-magazine for those outside of South Africa)
➕
Recieve daily email newsletters
➕
Access to full search results
➕
Access archive of magazine back copies
➕
Access to Projects in Progress
➕
Access to ONE Research Report of your choice in PDF format
RESEARCH CHANNEL AFRICA
R4500 (equivalent of R375 a month)
SUBSCRIBEAll benefits from Option 1
➕
Access to Creamer Media's Research Channel Africa for ALL Research Reports on various industrial and mining sectors, in PDF format, including on:
Electricity
➕
Water
➕
Energy Transition
➕
Hydrogen
➕
Roads, Rail and Ports
➕
Coal
➕
Gold
➕
Platinum
➕
Battery Metals
➕
etc.
Receive all benefits from Option 1 or Option 2 delivered to numerous people at your company
➕
Multiple User names and Passwords for simultaneous log-ins
➕
Intranet integration access to all in your organisation

















