Photo by: Syrah Resources
Name of the Project
Balama graphite project.
Location
Cabo Delgado, Mozambique.
Project Owner/s
Syrah Resources.
Project Description
Balama is one of the highest-grade, large-flake deposits globally. The project has mineral reserves of 108-million tonnes grading 16% total graphitic carbon (TGC) and mineral resources of 1.42-billion tonnes grading 10% TGC.
The project will be a high-grade, openpit operation using conventional mining methods with an extremely low stripping ratio. Operations will start with free-dig mining within the high-grade pits of Balama West using conventional truck-and-shovel mining. Operations will shift to the pits in Balama East thereafter.
The processing plant will have a feed rate of two-million tonnes a year using conventional processes, including crushing and screening, grinding, flotation, filtration and drying, as well as classification, screening and bagging.
Graphite concentrate will be transported using a sealed highway south-east of the project and shipped at the Port of Nacala, about 490 km away.
The mine is expected to produce an average of 365 000 t/y of graphite concentrate during its first ten years of production, and has a 50-year mine life.
The mine’s production will be sold to traditional industrial graphite markets and emerging technology markets.
Syrah also intends to pursue its downstream strategy, which involves further processing of flake graphite from Balama into spherical graphite at a plant in Louisiana, in the US. Spherical graphite is a high-margin, value-added product that is currently in significant demand, owing to its use in lithium-ion batteries for electric vehicle and energy-storage applications.
Potential Job Creation
The labour contingent increased to 499 staff in the quarter ended June 2021, excluding contractors.
Net Present Value/Internal Rate of Return
Based on the assumptions used in the feasibility study dated May 2015, the project has a post-tax net present value, at a 10% discount rate, of $1.1-billion and an internal rate of return of 71%, with a payback period of less than two years from the start of commercial production.
Capital Expenditure
Not stated.
Planned Start/End Date
Not stated.
Latest Developments
Unforeseen graphite market developments in 2023 cast a shadow on project sales and production momentum, while highlighting the company’s strategic position in global battery anode and natural graphite markets, chairperson Jim Askew said on May 24 at the company’s annual general meeting.
The lower production from Balama, along with natural graphite sales and weighted average prices in 2023, compared with those of 2022, were impacted on by synthetic graphite capacity expansion and government policy influence on the Chinese anode customer market, preventing Balama from achieving its full potential, according to Askew.
“These market conditions have continued in 2024, making it hugely challenging to support Balama sales and production. Positively, China’s exports of value-added graphite products returned to normal levels from February and March 2024, with licences being granted,” Askew has said.
Balama operated in-campaign plant operations during most of 2023. Measures under this operating mode has better positioned the company from an inventory management and cash flow perspective, considering volatile Chinese customer demand.
Production is being moderated until demand and price conditions warrant higher production levels, and natural graphite sales are being made from the company’s inventory positions.
“We are ready to quickly increase operational activity and production, should end-market conditions necessitate it. A sustainable cost position at Balama can be achieved as production rates increase, with uninterrupted operations underpinned by higher product sales,” Askew has explained.
Askew has noted that US, EU and China policy developments have resulted in much greater interest in Balama product purchases from ex-China anode customers and greater access to supply from battery manufacturers and automotive original-equipment manufacturers over the medium term.
Further, Askew has reported that the security environment in Cabo Delgado province has been good, with no issues affecting the company’s operations. Syrah has said that environmental, social and governance activities have been fundamental to its operating strategy and has underpinned its activities since the first planning of the Balama mine.
Key Contracts, Suppliers and Consultants
CPC Engineering (detailed engineering and design).
Contact Details for Project Information
Syrah Resources GM – investor relations John Knowles, tel +61 419 893 491 or email ljknowles@optusnet.com.au.