Australian-based industrial minerals and technology, Syrah Resources the owners and developers Balama Graphite Project remains optimistic despite anticipated challenges in the last quarter of the year
“During the first half of 2019, production of 92,000 tonnes and sales of over 100,000 tonnes saw Balama become globally significant in the natural graphite market, with growth in sales to China and Balama product going into the battery supply chain,” Shaun Verner, Managing Director and Chief Executive Officer of Syrah.
“We also continued to progress our Battery Anode Material Strategy (BAM) in the USA, with qualification shipments of unpurified spherical graphite dispatched to target customers.”
He further said construction and commissioning of the purification circuit of the BAM facility in Vidalia, Louisiana is nearing completion, and dispatch of purified spherical graphite for qualification purposes will follow.
“At both Balama and Vidalia, Syrah is highly focused on working safely and partnering with community and stakeholders as we build our market presence and develop shareholder value.”
Balama transitioned to operations with sales and shipments to a global customer base including the battery anode producers, from the start of 2018.
Syrah produced over 100,000 tonnes of natural graphite in 2018 and is the largest and first major new natural graphite operation developed outside of China.
Meanwhile, a sudden and material decrease in spot natural flake graphite prices in China has led the company to take immediate action in response to current market conditions.
“We will conduct an orderly reduction in production volume to the end of Q3 2019 to produce approximately 45,000 tonnes. In Q4 2019 we will significantly reduce production to approximately 5,000 tonnes per month to maintain operations.
“We have commenced a review of further immediate cost savings and an operational review for 2020. Our forecast cash balance of US$60 million at the end of September and additional available liquidity of US$38.5 million from the completion of the convertible note allows for flexibility to manage our near term production volumes in line with demand growth,” said Verner.
Despite the near term market challenges, lithium-ion battery demand remains positive with significant growth expected.
