Syrah signs major offtake deal with Marubeni

JOHANNESBURG (miningweekly.com) – Graphite developer Syrah Resources has clinched a second supply deal with Japanese major Marubeni Corporation, this time for 50 000 t/y of spherical graphite.

The five-year offtake agreement would afford Marubeni the exclusive right to import and sell coated and uncoated spherical graphite from Syrah’s Balama mine, in Mozambique, in Japan and Korea.

Marubeni’s clients included some of the largest battery manufacturers in those two countries.

“This agreement with Marubeni represents the largest spherical graphite offtake agreement that has been signed globally to date,” said Syrah MD Tolga Kumova.

The offtake agreement followed an earlier deal between the two companies in which Marubeni had agreed to buy 20 000 t/y of flake graphite.

“Marubeni has worked closely with Syrah to conduct premarketing activities in Japan and Korea for nearly 18 months. Extensive test work has been performed on numerous samples provided by the company, and results have shown that Balama spherical graphite is superior to current material supplied from China, exceeding customers’ expectations,” commented Marubeni general manager Ryoichi Mano.

As the latest offtake agreement only covered Japan and Korea, Syrah believed further opportunities were available in China, North America and Europe.

The company had completed an internal economic assessment on a proposed spherical graphite facility in the US, which was underpinned by growing interest by major lithium-ion battery manufacturers.

“The Marubeni agreement has validated our strategy and steadfast belief that the lithium-ion battery market will be the major source of growth for the graphite sector in the upcoming years,” said Kumova.

A 2015 feasibility study estimated that the Balama project would require capital investment of about $138-million to deliver a 380 000 t/y operation. During the first ten years of operation, the mine was expected to produce at an average rate of 365 000 t/y graphite concentrate and deliver a free cash flow of $160-million a year.