Syrah‘s vertical integration plans take shape

CBC Metal Time:Dec 02, 2020 18:10 Source:MINING WEEKLY

A bankable feasibility study (BFS) into the expansion of ASX-listed Syrah Resources' active anode material (AAM) production facility in Vidalia, in the US, has confirmed the positive economics for commercial scale natural graphite AAM production at the facility in Louisiana.

Syrah on Tuesday said that the BFS confirmed that 10000 t/y of AAM could be produced through the expansion of existing plant and infrastructure at Syrah’s 25-acre industrial site.

The facility currently has a production capacity of 5000 t/y of unpurified spherical graphite and 200 t/y of purified spherical graphite to battery specification.

The company said that the installation of a furnace in the first quarter of next year would enable the capacity to produce 200 t/y of natural graphite AAM, and would represent the furthest progress in non-Chinese vertically integrated production of natural graphite AAM globally.

To date, Syrah has invested $56-million in de-risking the market entry into the battery anode supply chain, including the construction and operation of the existing asset base in Vidalia, as well as technical product development.

Syrah on Tuesday told shareholders that the company would initially expand natural graphite AAM production capacity to 10000 t/y, and then would increase it in line with growing market demand.

The BFS estimated that the initial expansion project would require a capital investment of $138-million to bring production to 10000 t/y, and then a further $477-million to expand production further to 40 000 t/y.

The base-case production scenario would process some 18 000 t/y of natural graphite, while the expanded case would process 73000 t/y. Operating costs for the base case have been estimated at $3 149/t AAM, while the expanded costs have been estimated at $2704/t AAM.

“The BFS confirms strong positive economics for commercial scale natural graphite AAM production at Vidalia, with robust operating margins implied compared to current observed spot natural graphite AAM prices, which are arguably at the low point of the cycle,” said Syrah MD and CEO Shaun Verner.

“Vidalia vertically integrated with Balama presents a unique value proposition, scale, independence and localization within the US battery production, critical mineral security, and environmental, social and corporate governance auditability back to the graphite source.

“The completion of the BFS further enhances engagement with potential offtake customers, financiers and government, and represents an exciting milestone in the execution of our US and vertical integration strategy, which started in 2016,” said Verner.

Syrah is continuing with the front-end engineering design for the 10000 t/y AAM facility, which will be completed in the first quarter of next year, while commitment to a detailed design phase will be required after this, to maintain continuity of the project.

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