Syrah signs supply deal with Japanese major

PERTH (miningweekly.com) – Graphite developer Syrah Resources has signed a three-year offtake agreement with Japanese major Marubeni Corporation, giving it exclusive rights to sell flake graphite from the Balama project, in Mozambique, in Japan and Korea.

Under the terms of the agreement, Marubeni would purchase some 20 000 t/y of flake graphite from Syrah, across various size fractions, with the Japanese firm then marketing the products to its customers.

Product prices would be negotiated on a quarterly basis.

“This agreement represents another significant offtake agreement that we have signed in the traditional flake graphite market. Syrah has worked closely with Marubeni for over 14 months to successfully complete product qualifications and due diligence with various potential customers in Japan and Korea,” said Syrah MD Tolga Kumova.

In January this year, Syrah signed a statement of sales intent with raw materials supplier Hiller Carbon, granting the company exclusive rights to sell natural graphite recarburiser in the US, Canada and Mexico. Hiller Carbon was likely to purchase between 25 000 t/y and 35 000 t/y of recarburiser from the Balama project.

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.