Syrah Resources, an Australian graphite producer, secured a $53 million loan waiver from the U.S. DFC following protests limiting access to its Balama mine in Mozambique. The company declared a force majeure and halted production in July 2023 due to sufficient inventory and low demand. Syrah reported challenges stemming from ongoing protests after general elections, but has not defaulted on existing loans, and plans to restart production in late 2024.
Syrah Resources, an Australian-listed graphite producer, has secured a $53 million loan waiver from the U.S. International Development Finance Corporation (DFC). This comes after the company triggered events of default on U.S. government loans connected to its Balama mine in Mozambique. A force majeure was declared at the site on December 12 due to protests restricting access to the mine. While Syrah has not defaulted on its $150 million DFC loan or the $102 million U.S. Department of Energy loan, operational staff have departed. Security personnel remain in place, and access to the remaining DFC loan will be contingent upon the resumption of production, although no date for this restart has been announced. The company halted graphite production at Balama in July owing to adequate inventory and low demand for graphite fines. In the second quarter of the year, Syrah produced 24,000 tons of graphite and has been working through its existing stockpile. Plans to recommence production were projected for September to December 2024 to restore inventory levels. Protests that began in September escalated following the confirmation of election results favoring the Frelimo party, resulting in ongoing operational challenges. The firm noted that the protests are causing significant disruptions to its activities at Balama.
The situation at Syrah Resources’ Balama mine in Mozambique is marked by external socio-political pressures that have impacted operations. Following civil unrest, the company declared a force majeure, which allows for certain contractual obligations to be postponed without penalty. The DFC’s loan waiver is a crucial lifeline for the company as it navigates these challenges and aims to stabilize production in response to market demand. The backdrop of Mozambique’s contentious political environment further complicates the operational landscape for Syrah Resources as they strive to manage their assets effectively.
In conclusion, Syrah Resources has successfully obtained a $53 million loan waiver from the DFC amidst challenging circumstances at its Balama mine due to civil unrest. Although there has been no default on payment obligations, the company faces significant operational difficulties instigated by the protests that erupted after the recent elections. The firm is strategically planning to recommence graphite production while maintaining inventory levels, with careful oversight of the prevailing socio-political climate affecting its operations.
Original Source: www.argusmedia.com
