The Mozambican Ministry of Mineral Resources and Energy has admitted that the decision by the Australian mining company Syrah to suspend graphite production in the country compromises the revenue targets that the state had projected.
Syrah announced on 18 July that in April it had produced 15,000 tonnes of graphite for electric car batteries, which it exports from the district of Balama, in the northern province of Cabo Delgado. But it stopped production the following month.
“Operations at the Balama plant were interrupted, resulting in no production in May and June 2023, due to volatility in the Chinese anode market and the good availability of stock of finished products”, reads the second quarter activity report released by Syrah, in which it estimates costs of four million dollars for each month of closure at that unit.
According to Mozambique’s national director of Geology and Mines, Cândido Rangeiro, the measure could undermine this year’s graphite production projections and the revenue for the state generated by this ore.
“We are saddened by this because we actually had projections for graphite production and this target will probably not be reached”, Rangeiro said.
Without specifying figures, he said that the impact could be considerable, bearing in mind that Syrah is the largest graphite producer in Mozambique, ahead of GK, which exploits this resource in Ancuabe district, also in Cabo Delgado.
“This company [GK] has not communicated any stoppage to us, perhaps because it produces for a parent company that is in Germany which has not instructed its subsidiary in Mozambique about any decision regarding its operation in the north”, he added.
Welcoming the fact that Syrah’s decision had no impact on jobs, Rangeiro pointed out that the dynamics of the international raw materials market are characterised by fluctuations in demand and supply.
“Today we are facing this situation but tomorrow I believe it will change”, he stressed.
The Balama mine began commercial production four years ago and it was in the spotlight in December when Syrah announced an agreement with electric vehicle multinational Tesla, which intends to use graphite from the mine, described as one of the largest deposits of this type of mineral in the world.