Mozambique Mining: Syrah Resources targets EV battery market with Balama graphite mine

The Balama project will cut into China’s dominance in the sector.

Australian-listed Syrah Resources is targeting the market for electric vehicle batteries with its Balama graphite mine in Mozambique, which started production in November.

A global scramble is on for commodities such as graphite, cobalt and lithium, which are among the key components in the rechargeable lithium-ion batteries used to power mobile devices and electric vehicles.

“The growth market and our focus in the coming years is very much in the lithium-ion battery segment,” Syrah CE Shaun Verner said.

Verner said Syrah saw the market for natural-flake graphite more than doubling over the next eight years to 1.6-million tonnes from 700,000 tonnes currently, with the battery industry accounting for the bulk of that demand.

Battery demand is now about 200,000 tonnes, or about 30% of the market.

“About 70% of our production is … the smaller flake in demand in the battery sector,” Verner said.

Capacity for the Balama mine and plant is 350,000 tonnes annually and the company is looking at 160,000 to 180,000 tonnes in the first year, reaching full production in three years and cutting into the dominance of China, where 60% of global supply originates.

By 2020 it will be providing 35%-40% of global supply if projections are on target.

“In our first four months of operation we have exported to 13 countries across Asia,” Verner said, with most going to China, Japan and South Korea. In Europe, Germany has been the biggest consumer.

The resource is close to the surface and easy to access.

The graphite is exported through the port of Nacala, taken there by road on a 500km journey from the mine.

SA’s Grindrod has a logistics contract to provide transport and warehousing.

Infrastructure challenges in the Southern African country, which is extremely poor and underdeveloped, have stymied the growth of its coal sector. Mozambique also has huge offshore gas reserves that are being brought to commercial production.

Parts of Mozambique’s remote north and central regions have been hit in recent years by security incidents and banditry but Verner said the project had not been affected.

“We have not seen any security concerns right through the period from exploration to pre-development, construction and now into operations,” he said. source: Reuters