Australia-based Syrah Resources Limited signed a binding offtake agreement with Tesla to supply natural graphite Active Anode Material (AAM) from its vertically integrated AAM production facility in Vidalia, Louisiana.

Tesla will offtake the majority of the proposed initial expansion of AAM production capacity at Vidalia at a fixed price for an initial term of four years commencing from the achievement of a commercial production rate, subject to final qualification.

Vidalia battery anode material project site

Tesla also has an option to offtake additional volume from Vidalia subject to Syrah expanding its capacity beyond 10kt per annum AAM.

Syrah said that the agreement provides a compelling foundation to proceed with the initial expansion of Vidalia’s production capacity; Syrah plans to make a final investment decision for construction of this expanded facility in January 2022, subject to financing commitments.

Syrah is advancing commercial and technical engagement with other target customers to develop Vidalia AAM for mass production and secure additional long-term purchase commitments for Vidalia.

The Vidalia battery anode material plant will process natural graphite concentrate shipped in from Syrah’s Balama mine in Mozambique. The Balama graphite operation is a globally significant natural graphite resource.

Balama mine operation in Mozambique

Balama features a projected 50+ year mine life and high reserve grade (16% total graphitic carbon). The product mix includes jumbo, large and medium flake for industrial applications and fines.

Syrah will transport the natural graphite concentrate (-100 mesh fines material) from Balama Graphite Operation to Vidalia. There the natural graphite is shaped into a spherical shape and purified to produce an anode precursor material. The precursor material is then coated and heat treated to produce a finished AAM.