Syrah Resources has been given a $150 million loan by the United States International Development Finance Corporation to support the development of its graphite operation in Mozambique. An initial disbursement of $73 million is expected in November.
In a news release this week, the Australian miner said that it will use the loan to fund the capital requirements of its Balama graphite project.
The loan will be divided into two tranches: a $100 million tranche for the current expansion of its tailings storage facility and potential development of a vanadium resource; and a $50 million tranche for the longer-term expansion of the tailings facility.
This loan, the first by DFC for a graphite project, “further demonstrates the importance of Balama, which is the largest integrated graphite mining and processing operation globally, to the critical minerals strategy of the US,” stated Syrah’s managing director and CEO Shaun Verner.
The Balama operation currently produces graphite from a total ore reserve of 110 million tonnes at 16% carbon grade. This high-grade ore is then processed at a 2-million-tonne-per-annum facility yielding approximately 350,000 tonnes of graphite annually. The life of mine is estimated at 50 years.
Execution of the loan agreement follows a three-year process, which included detailed market, technical, legal, environmental and social due diligence on Balama. Syrah first applied to DFC for loan funding for the project in May 2021, and due diligence by DFC commenced in September 2021. Two years later, DFC gave conditional approval for the $150 million loan.
The loan is aligned with DFC’s commitment to foster trade and investment deals and partnerships between the US and Africa, DFC stated. As Balama is a critical piece of the supply chain development for the global energy transition, the loan also supports the first priority pillar of the G7’s Partnership for Global Infrastructure and Investment, it added.
DFC’s acting vice president of infrastructure Danielle Montgomery said: “This is a highly significant transaction that will support more diverse, resilient, and sustainable critical mineral supply chains and bolster investment in Africa.”
